1989 (6) TMI 34 - HC - Income Tax

Summary

Issues:
1. Application of section 144B to the assessment year 1971-72
2. Bar on limitation for the assessment
3. Compliance with the provisions of section 129

Analysis:

Issue 1: Application of section 144B to the assessment year 1971-72
The case involved a fresh assessment for the assessment year 1971-72 after the original assessment under section 144 was set aside by the Appellate Assistant Commissioner. The Tribunal confirmed the setting aside of the assessment, leading to the initiation of proceedings for a fresh assessment. The Inspecting Assistant Commissioner issued a draft assessment order under section 144B, and the assessee was given an opportunity to be heard. The court held that section 144B applied to proceedings completed after January 1, 1976, and since the assessment was made in 1976, the contention that section 144B did not apply was rejected. The court found no error in the Tribunal's decision that section 144B applied to the assessment in question.

Issue 2: Bar on limitation for the assessment
The assessee contended that the assessment order was barred by limitation. However, the court noted that the draft assessment order was provided within the specified time, and the assessee raised objections and was given an opportunity to be heard by the Inspecting Assistant Commissioner. The assessment made within the timeframe was deemed valid, and the court upheld the Tribunal's decision that the assessment was not barred by limitation.

Issue 3: Compliance with the provisions of section 129
The assessee argued that the provisions of section 129 had not been complied with. Section 129 allows the assessee to demand a rehearing before any assessment order is passed. The court observed that the assessee was given the opportunity to be heard after a change in the Income-tax Officer, and no demand was made for reopening previous proceedings under section 129. As the assessee was reheard before the assessment order was passed, the court held that section 129 was properly complied with. The court affirmed the decision of the authorities below that section 129 had been properly complied with.

In conclusion, the court found no error in the Tribunal's decision and answered all questions in favor of the Revenue and against the assessee. The judgment upheld the application of section 144B, rejected the limitation bar contention, and confirmed the compliance with the provisions of section 129.