2000 (2) TMI 4 - SUPREME COURT

Validity of order of assessment u/s 147 - return filed u/s 139 and refund application was pending to be processed - Along with the return assessee has filed an application u/s 237 for refund of tax - Scope of the noting recorded by the AO - Held that:- it could not be said that the ITO gave finality to the refund since no refund is granted either in the hands of the trust or in the hands of the beneficiaries. It is an inconclusive note where the ITO left the matter at the stage of consideration even with regard to refund in the hands of the beneficiaries. This note was also not communicated to the trustees.

In any case if it is an order, it would be appealable under s. 249 of the Act. Since period of limitation starts from the date of intimation of such an order, it is imperative that such an order be communicated to the assessee. Had the ITO passed any final order, it would have been communicated to the assessee within a reasonable period.

By merely recording that in his opinion, no credit for tax deducted at source is to be allowed the ITO cannot be said to have closed the proceedings finally.

During the pendency of the return filed under s. 139 of the Act along with refund application under s. 237 of the Act, action could not have been taken under s. 147/148.

Decided against the revenue.