A. Kalyanasundharam, Sr. Vice President - (1.) THIS is an appeal by the assessee, individual, aggrieved by the order of the CIT(A) dated 8-3-2002. The plea of the assessee in the grounds of appeal raised is with regard to the fresh assessment and its validity.
(2.) The learned counsel for the assessee Mr. S. Kannan submitted that the assessee filed her return of income on 16th July, 1998 consequent to the notice issued under Section 148 of the Income-tax Act. The challenge of the assessee was that the assessee was served with a notice under Section 143(2) of the Act on 16-11-2000. The learned Departmental Representative Mr. R. Venkataraman, who had the records with him, examined the records and submitted that the notice under Section 139(2) was issued to the assessee some time 16th October, 1999. The plea of the learned counsel Mr. Kannan was that Section 148 clearly states that a return filed in pursuance to notice under Section 148 for all purposes of the Act shall apply as if such a return were a return required to be furnished under Section 139. He submitted that the return would therefore be treated as one filed under Section 139. He made a reference to the provisions of Section 143(2) of the Act and submitted that it required the Assessing Officer to issue a notice and serve it on the assessee within a period of twelve months from the end of the month in which the return was furnished. He submitted that the return having been filed on 16th July, 1998, twelve months period available for issue and service of the notice expired on 31st July, 1999. The notice, as is stated by the learned Departmental Representative that it was served on 16th October, 1999, though the assessee insisted was not received, is still beyond the twelve months statutory and mandatory period permitted under the Act. Therefore, the notice having been issued beyond the time permitted for issue of notice, the consequent assessment framed may have to be quashed. In this regard he placed reliance on the decision of Ahmedabad Bench of the Tribunal in Rakesh S. Manila v. Dy. CIT [2002] 74 TTJ 836, a copy of which has been placed on our records. In this case it was a case of block assessment. Though it was a block assessment, the Bench recognised that the provisions in regard to framing of assessment was governed by the provisions of Section 143. It was also recognised that for framing of an assessment issue of notice under Section 143(2) was mandatory. It further recognised that the mandatory period of one year having been prescribed if not followed by the Department, the assessment cannot be framed on the assessee. The learned Departmental Representative placed on our records copy of the order of the Agra Bench of the Tribunal in Chandra Bhan Bansal v. Dy. CIT [2001] 79 ITD 639. He insisted that in this case the Tribunal had held clearly that the time limit prescribed in Section 143(2) for issue of notice is not applicable to a return filed in response to notice under Section 148. He heavily insisted that this decision squarely applies to the facts of the instant case. He also relied upon the decision of Rajasthan High Court in Sumerpur Truck Operators Union v. ITO. He also relied upon the decision of the Madras High Court in Smt. Indira Devi v. CIT [1994] 210 ITR 537. Rival contentions in regard to the above have been very carefully considered. The present assessment year is 1996-97. Section 153(2) of the Act prescribes the time limit for framing of an assessment especially reopened assessment. The section as it stood for the assessment year reads: "No order of assessment, reassessment or recomputation shall be made under Section 147 after the expiry of two years from the end of the financial year in which the notice under Section 148 was served", provided that where the notice under Section 148 was served on or after the 31st March, 1987, such assessment, reassessment or recomputation may be made at any time up to the 31st day of March, 1990.
(3.) THE Income-tax Act has been split into various parts and Sections 139 to 158 fall in Chapter XIV where procedure for assessment has been prescribed. THE procedure Starts with the requirement of filing of the return voluntarily by the assessee, i.e., under Section 139(1) of the Act. It then proceeds with issue of notice under Section 139(2) calling upon assessee to file a return of income. Section 139(3) of the Act prescribes the return to be filed by a person who has suffered a loss in his business or profession. Section 139(4) prescribes the time for furnishing of a return by a person who could not file his return voluntarily or consequent to a notice calling him to file the return. Section 139(5) of the Act permits a person to file a revised return in the event of he having filed return voluntarily before the expiry of one year from the end of the assessment year or completion of the assessment, whichever is earlier. It prescribed certain other provisions as well. Section 139A prescribes a person to apply for Permanent Account Number. Section 140 prescribes the person who could sign the return so that the return could be treated as valid return. Section 140A talks of payment of self-assessment tax. Section 142 prescribes enquiry before assessment. Section 143 prescribes the assessment. It has Section 143(1) of the Act which permits the Assessing Officer to frame the assessment on the basis of information available on his records. Section 143(2) of the Act talks a situation where return has been filed under Section 139 or in response to a notice calling for filing of return under Section 142 in which the Assessing Officer feels it necessary or expedient making sure that the assessee has not understated the income or has not computed excessive loss or has not underpaid the tax in any manner serve on the assessee a notice' requiring him on a dale to be specified therein either to attend his office or to produce or cause to be produced therein evidence where the assessee may rely in support of the return. This section has proviso which says that no notice under this section shall be served on the assessee after the expiry of twelve months after the end of the month in which the return is furnished. THE purpose of this section is that in a case where the Assessing Officer feels the presence of the assessee necessary, he would have to necessarily comply with this mandatory requirement of serving on the assessee a notice within the period specified in the Act, namely twelve months from the end of the month in which the return is furnished. It is, therefore, clear that the Assessing Officer if he fails to issue a notice within twelve months from the end of the month in which the return was furnished, he cannot thereafter issue a notice under Section 143(2) of the Act to the assessee. THE other provisions talk of various other items like regular assessment, ex parte assessment, best judgment assessment and method of accounting in certain cases. This is followed by income escaping assessment, which requires issue of a notice where income was found to have escaped assessment. This is followed by Section 149 which prescribes the time limit for issue of the notice. This section is followed by other provisions like sanction for issue of notice. Section 153 prescribes the time limit as has been reproduced earlier in regard to framing of assessment under various circumstances, which are all mandatory and binding on the administrators of the Act. This is followed by rectification of mistakes and other features.;