2002 (4) TMI 242 - AT - Income Tax

Summary

Issues:
1. Validity of assessment order based on the return of income filed beyond the due date.
2. Waiver of notice under section 143(2) of the Act.
3. Framing of assessment under section 143(3) read with section 144/115.

Issue 1: Validity of assessment order based on late return filing
The appellant challenged the assessment order for the assessment year 1994-95, arguing that the Assessing Officer (AO) erred in completing the assessment based on a return of income filed after the due date. The appellant contended that the return filed on 17th Feb., 1997, was beyond the time prescribed under sections 139(1) and 139(4) of the Act. The appellant claimed that the return should have been annulled by the Commissioner of Income Tax (Appeals) (CIT(A)). However, the CIT(A) held that the return filed on 17th Feb., 1997, was valid as it was filed in compliance with the notice under section 142(1)(i) of the Act.

Issue 2: Waiver of notice under section 143(2)
The appellant raised a contention regarding the waiver of notice under section 143(2) of the Act. The AO reported that the appellant consented to not receiving a formal statutory printed notice but responded to queries raised on 18th Feb., 1997. The appellant's compliance with the queries indicated a waiver of the notice requirement. The CIT(A) upheld the waiver, citing judicial pronouncements that once a party waives an irregularity, they cannot later challenge it. The appellant's objection on this ground was overruled by the CIT(A).

Issue 3: Framing of assessment under section 143(3) read with section 144/115
The appellant contested the framing of the assessment under section 143(3) read with section 144/115, arguing non-compliance with various requirements related to business and agricultural income. The appellant claimed that the assessment order was invalid due to procedural errors, including the absence of a notice under section 143(2) of the Act. However, the Tribunal found that a valid return was filed by the appellant within the permissible timeline, and the waiver of notice under section 143(2) did not invalidate the assessment order. The Tribunal agreed with the CIT(A) in setting aside the assessment order and remanding the case to the AO for a fresh assessment after providing the appellant with an opportunity to be heard.

In conclusion, the appeal was dismissed, affirming the validity of the assessment order based on the return filed in compliance with the notice under section 142(1)(i) and upholding the waiver of notice under section 143(2) as valid. The Tribunal emphasized that procedural irregularities did not invalidate the assessment order, and the case was remanded for a fresh assessment considering all relevant materials and explanations provided by the appellant.