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2015 (8) TMI 226 - AT - Income TaxValidity of reopening of assessment - non service of notice u/s. 143(2) before completion of the assessment u/s. 147 - DR relied on the provisions of section 292BB of the Act and submitted that non-issue of notice u/s. 143(2) within the time specified under the proviso to sec. 143(2)(ii) will not render the order of reassessment null and void - Held that:- The two provisos in sub-section (1) to section 148 has been inserted with retrospective effect from 1st October, 1991. The gist of the two provisos may suitably be stated thus- Where a return has been furnished daring the period commencing on 1st October, 1991 and ending on 30th September, 2005, in response to a notice of reassessment served under section 148, and subsequently a notice has been served under section 143(2) [or 143(2)(ii), as the case may be] after the expiry of twelve months as specified in the relevant proviso but before the expiry of the time-limit for making the assessment, reassessment or re-computation as specified in section 153(2), such (otherwise time-barred) notice shall be deemed to be a valid notice. Further, the new Explanation inserted with effect from 1st October, 2005, specifically clarifies that the aforestated (newly inserted) provisos shall not apply to any return which has been furnished on or after 1st October, 2005, in response to a notice served under section 148(1) of the Act. The purpose of the amendment is to ensure that notices which were issued and barred by limitation and those which were not issued and which could not have been issued should be validated by the Finance Act, 2006 with retrospective effect from 1st April, 1990 amending section 142 for the purpose of validating notices which were otherwise not issued or served within the time-limit. The invalidity of notice as well as the absence of any notice became fatal to the proceedings and are sought to be validated and justified by the retrospective amendments. The explanation clarifies that the amended provisions will not apply to any return which has been furnished on or after 1st October, 2005, in response to a notice served under section 148(1) of the Act. Thus the legislature has accepted the position that issue and service of notice u/s.143(2) of the Act within the time limit laid down in those provisions is mandatory. We therefore, of the view that issue and service of notice u/s. 143(2) of the Act within the period of limitation contemplated under the proviso to sec. 143(2)(ii) is mandatory for validity of assessment u/s. 147 of the Act. Applicability of provisions of section 292BB - It is clearly from the statutory provisions that these provisions only insulate the AO from the proof of service of notice u/s. 143(2) of the Act. It does not in any way insulate the AO from default in issuing notice u/s. 143(2) within the period of limitation contemplated therein. When the records show that there was no issue of notice u/s. 143(2) within the period of limitation prescribed under the said proviso, the Revenue cannot take advantage of the provisions of section 292BB. In other words, “issue of notice” and “service of notice” are two different aspects and what is covered by section 292BB is only “service of notice”. Non-issue of notice u/s. 143(2) within the period of limitation would not be covered under the ambit of section 292BB of the Act. The decision of the Tribunal in the case of Amithi Software Technologies Pvt. Ltd. (2014 (2) TMI 989 - ITAT BANGALORE) clearly supports the plea of the assessee in this regard. We therefore hold that assessment proceedings are invalid for the reason that notice u/s. 143(2) had not been issued and served within the time limit prescribed by those provisions. Accordingly, the order of assessment is annulled. - Decided in favour of assessee.
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