9911796707
|
Home
Issues involved: Interpretation of the provisions of section 144B of the Income Tax Act regarding the consequences of non-compliance with the prescribed procedure on the validity of assessment.
Summary: The High Court of Karnataka addressed a reference from the Income-tax Appellate Tribunal regarding the interpretation of section 144B of the Income Tax Act in the context of an assessment for the year 1977-78. The assessee had declared a loss in the return, but the assessing officer made adjustments resulting in a significant difference. The Assessing Officer did not follow the procedure under section 144B, leading to the cancellation of the assessment by the Appellate Authority. The Tribunal held that non-compliance with section 144B does not invalidate the assessment but constitutes a procedural infirmity, directing the Assessing Officer to redo the assessment following the prescribed procedure. The key question was whether non-compliance with section 144B renders the assessment void ab initio. Section 144B outlines a procedure for cases where the assessing officer proposes adverse variations exceeding a specified amount, requiring notice to the assessee and consideration of objections. The Court emphasized that section 144B is a safeguard for the assessee during assessment objections, with the Inspecting Assistant Commissioner providing guidance to the Assessing Officer. The Court concluded that non-compliance with section 144B(4) does not invalidate the assessment but necessitates a reassessment following the prescribed procedure. Therefore, the Tribunal's decision to direct a fresh assessment was deemed appropriate, and the question was answered in favor of the Revenue.
|
