COMMISSIONER OF INCOME TAX Vs. MOHINDER SINGH

JUDGEMENT

(1.) THIS appeal has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 (in short, "the Act") against the order dated 26.7.2006, Annexure A.III, passed by the Income Tax Appellate Tribunal, Chandigarh Bench 'B', Chandigarh (in short, "the Tribunal") in ITA No. 504/CHANDI/2004 for the assessment year 1995 -96, claiming following substantial question of law: -

(2.) A few facts relevant for the decision of the controversy involved, as narrated in the appeal, may be noticed. The respondent is an individual. He filed his income tax return for the assessment year 1995 -96 on 28.5.1999 declaring income of Rs. 63,162/ - besides agricultural income of Rs. 10,000/ -. As the return was filed beyond the period stipulated under section 139(1)/139(4) of the Act and was invalid, proceedings under section 147 of the Act were initiated by issuing notice under Section 148 of the Act on 15.3.2002 after obtaining prior approval of the Joint Commissioner of Income Tax, Range I, Ludhiana. During the course of assessment proceedings, the assessee contested the legality of notice under section 148 of the Act without complying with the provisions of the said section i.e. filing of return within the prescribed period. He did not file any information during the course of assessment proceedings and the assessment was completed under section 144 vide order dated 31.3.2003 at an income of Rs. 21,31,522/ - apart from agricultural income of Rs. 10,000/ - after taking into account the material available on record. Aggrieved by the order, the respondent preferred appeal before the Commissioner of Income Tax (Appeals) -1 Ludhiana. Vide order dated 21.1.2004, Annexure A.II, the appeal was allowed and the additions made by the Assessing Officer were deleted on the basis of material furnished before him. Not satisfied with the order, the revenue filed appeal before the Tribunal. Vide order dated 26.7.2006, Annexure A.III, the appeal was dismissed. The Tribunal also admitted the ground of the assessee about validity of proceedings under section 147 under rule 27 of ITAT Rules 1963 and held that notice under section 148 of the Act had not been served on the assessee which was the precondition for reopening the assessment under section 147 and hence subsequent proceedings under section 147 of the Act and the reassessment were null and void. Hence the present appeal by the revenue.

(3.) WE have heard learned counsel for the appellant and perused the record. The legal representatives of the respondent assessee as per office record have been served. No one has chosen to oppose the appeal. After hearing learned counsel for the appellant, we find merit in his contentions.