TMI Blog2009 (12) TMI 559X X X X Extracts X X X X X X X X Extracts X X X X ..... s have been admitted on the following substantial questions of law : 1. Whether on the facts and in the circumstances of the case, there was infraction of the provisions contained in rule 11 of the Income-tax (Appellate Tribunal) Rules, 1963, and if so, as to whether the same has vitiated the order of the Tribunal dated December 29, 2005 ? 2. Whether on the facts and in the circumstances of the case, in a case where the return of income is furnished under section 148 of the Income-tax Act, 1961, service of notice under section 143(2) of the said Act beyond a period of 12 months from the end of the month in which the return was filed would render the reassessment proceedings invalid? 2. Though the above questions framed have been sought to be reformulated by the appellants at the hearing we did not find any substantial difference in the questions as framed by the court and those suggested on behalf of the appellants. We, therefore, proceed to consider the appeals on the questions of law already framed, as noticed above. 3. The brief facts that will be required to be noticed for an effective adjudication of the issues arising in the two appeals may now be stated. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missions before the Assessing Officer which are available on record. Sri Bhuyan has also submitted that the representative of the assessee was heard by the Assessing Officer. In such circumstances no prejudice has been caused to the assessee by the absence of notice under section 143(2) of the Act. In this regard, Sri Bhuyan has placed before the court a decision of the Kerala High Court reported in K.J. Thomas v. CIT [2008] 301 ITR 301 (Ker). 6. In reply, Dr. A. K. Saraf, learned counsel for the respondent-assessee, has submitted that the power of the Tribunal under section 254 of the Act read with rule 11 of the Income-tax (Appellate Tribunal) Rules is very wide. An appeal can be disposed of by the learned Tribunal on any ground urged in the memo of an appeal or on a ground taken with the leave of the Tribunal or on any other ground. According to Dr. Saraf, the proviso to rule 11 of the Income-tax (Appellate Tribunal) Rules deals with the third category of cases, i.e., where the learned Tribunal proceeds to consider the appeal on any other ground. It is only in such a situation, according to Dr.Saraf, that the proviso stipulating the requirement of opportunity will operate. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gure higher than the returned loss, nor a further refund can be given except what was due on the basis of the returned income, and which would have already been allowed under the provisions of section 143(1)(a)(ii). 5.13 A proviso to sub-section (2) provides that a notice under the sub-section can be served on the assessee only during the financial year in which the return is furnished or within six months from the end of the month in which the return is furnished, whichever is later. This means that the Department must serve the said notice on the assessee within this period, if a case is picked up for scrutiny. It follows that if an assessee, after furnishing the return of income does not receive a notice under section 143(2) from the Department within the aforesaid period, he can take it that the return filed by him has become final and no scrutiny proceedings are to be started in respect of that return." (emphasis is ours), 9. Dr. Saraf has also placed before the court a decision of the Punjab and Haryana High Court reported in Vipan Khanna v. CIT [2002] 255 ITR 220 (P H) wherein the following view has been taken (page 233) : "The returns filed in response to no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est or of the amount of refund due. Alternatively, the Assessing Officer, if he has reason to believe, that any claim made in the return is inadmissible or if he considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not underpaid the tax is required to serve on the assessee a notice under section 143(2) requiring the assessee to produce or cause to be produced the particulars specified in the notice or such particulars on which the assessee relies in support of the claim made. Thereafter, on the appointed day, the Assessing Officer after considering such evidence and particulars as the assessee may produce is required to finalise the assessment and determine the sum payable, if any, by the assessee under section 143(3). This is the scheme of assessment that is con-templated by sections 142 and 143 of the Act. 13. The above scheme makes it abundantly clear that on receipt of the return that may be filed by an assessee after receipt of the notice under sec-tion 148 the Assessing Officer has an option of proceeding either under section 143(1) or if he so considers it necessary under section 143(2) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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