COMMISSIONER OF INCOME TAX-III Vs. NIRALI SPECIFIC FAMILY TRUST
LAWS(GJH)-2016-3-257
HIGH COURT OF GUJARAT
Decided on March 03,2016

Commissioner of Income Tax -III Appellant
VERSUS
Nirali Specific Family Trust Respondents

JUDGEMENT

Akil Abdul Hamid Kureshi, J. - (1.) These tax appeals were admitted for consideration of following common substantial questions of law: "TAX APPEAL NO. 112 0f 2009(ASSESSMENT YEAR 1996 -97) (A) Whether the Appellate tribunal is right in law and on facts in holding that the re -assessment order passed under Section -147 was improper and required to be cancelled? (B) Whether the Appellate Tribunal is right in law and on facts in directing the Assessing Officer to deduct indexed cost of acquisition from full value of sale consideration? (C) Whether the Appellate Tribunal is right in law and on facts in directing the Assessing Officer to allow long term capital loss of Rs. 1,65,04,393/ -? (D) Whether the Appellate Tribunal is right in law and on facts in not appreciating that the investment made in shares are held by the assessee as stock -in -trade? TAX APPEAL NO. 113 OF 2009 (ASSESSMENT YEAR 1997 -98) (A) Whether the Appellate Tribunal is right in law and on facts in holding that the re -assessment order passed under Section -147 was improper and required to be cancelled? (B) Whether the Appellate Tribunal is right in law and on facts in directing the Assessing Officer to deduct indexed cost of acquisition from full value of sale consideration? (C) Whether the Appellate Tribunal is right in law and on facts in directing the Assessing Officer to allow long term capital loss of Rs. 3,27,082/ -? (D) Whether the Appellate Tribunal is right in law and on facts in not appreciating that the investment made in shares are held by the assessee as stock -in -trade -
(2.) This was on the basis that counsel for the Revenue had pointed out that in Tax Appeal No. 151/2006, similar question is being considered by the High Court. We have called for the judgement of the High Court dated 11.12.2014 in the said appeal from perusal of which it appears that the question in the said appeal arose in the background of the service of notice under Sec. 143(2) of the Income Tax Act, 1961, and not regarding non issuance of the notice altogether. The Bench remanded the proceedings for fresh consideration by CIT (Appeals).
(3.) In the present case, however, we notice that CIT (Appeals) as well as the Tribunal had annulled the assessment proceedings on the ground that no notice under Sec. 143(2) of the Act was ever issued. This issue is now squarely covered by the judgement of Supreme Court in case of Assistant Commissioner of Income -tax and another v/s. Hotel Blue Moon reported in : (2010) 321 ITR 362 (SC). Though this judgement was rendered in the background of block assessment, nevertheless, it was observed that for any assessment under Sec. 143(3) of the Act, notice under Sec. 143(2) within the time limit would be essential. It was held that omission on part of the assessing authority to issue notice under Sec. 143(2) cannot be a procedural irregularity and is not curable and dispensable.;


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