2008 (10) TMI 565 - HC - Income Tax

Income escaping assessment non issuance of notice u/s 148 remedy under section 292BB held that - The service of notice is a pre-condition for framing an assessment order under section 147. The learned counsel for the appellant sought to place reliance on the provisions of section 292BB of the said Act which has been introduced with effect from 1-4-2008. However we feel that no reliance on that provision can be placed for two reasons. The first reason being that the said provision is not applicable to the assessment year 2001-02. The second reason being that this argument was not at all being raised before the Tribunal. Decided against the revenue.

Summary

Issues:
Notice under section 147/148 of the Income-tax Act, 1961.

Analysis:
The appeal before the High Court pertained to the assessment year 2001-02 and challenged the order passed by the Income-tax Appellate Tribunal regarding the notice under section 147/148 of the Income-tax Act, 1961. The assessee contended that no notice under section 148 had been issued or served, questioning the jurisdiction of the reassessment proceedings. The Tribunal allowed the assessee to raise this jurisdictional plea, determining that there was indeed no service of notice under section 148. Consequently, the Tribunal held the assessment made under section 147/143(3) as invalid and ordered it to be quashed.

The High Court observed that the initiation of proceedings under section 147 of the Income-tax Act required the service of notice as mandated in section 148. The absence of such notice rendered the assessment order invalid. The appellant sought to rely on section 292BB of the Act, effective from 1-4-2008, but the Court dismissed this argument for two reasons. Firstly, the provision was not applicable to the assessment year 2001-02. Secondly, the argument was not raised before the Tribunal, and the amendment postdated the order in question, precluding its consideration.

Considering the lack of notice and the inapplicability of the appellant's arguments, the High Court concluded that no substantial question of law arose for their consideration. As a result, the appeal was dismissed, upholding the Tribunal's decision to quash the assessment due to the absence of a valid notice under section 148 of the Income-tax Act, 1961.