2012 (8) TMI 523 - MADRAS HIGH COURT

Validity of reassessment proceedings made in absence of any notice issued u/s 143(2) - notice issued u/s 142(1) to which assessee responded - subsequently no notice issued u/s 143(2) - Held that:- On the reply to the notice u/s 142(1), reiterating the original return which was found incorrect, the AO should have follow up by a notice u/s 143(2). Merely because the matter was discussed with the assessee and the signature is affixed, it does not mean the rest of the procedure of notice u/s 143(3) stood complied with.

In completing the assessment u/s 148, compliance of the procedure laid down u/s 142 and 143(2) is mandatory. On the admitted fact that beyond notice u/s 142(1), there was no notice issued u/s 143(2), and in the light of the fact that the very basis of the reassessment was the failure on the part of the assessee in not disclosing the capital gains arising on the transfer of property for assessment and that admittedly the assessee had requested the officer to accept the original return as a return filed in response to Section 148, we hold that there was total failure on the part of the Revenue from complying with the procedure laid down u/s 143(2), which is mandatory.

Although on merits, contention of the assesee that the capital gains would not be assessable at the hands of the firm is not acceptable, yet for the reasons that in the absence of notice u/s 143(2) reassessment could not be held to be validly made - Decided in favor of assessee