INCOME TAX ACT, 1961

Section 148

Reassessment - Notice under section 148 - Issuance of second notice under section 148 without completing pending reassessment proceedings -

First notice under section 148 was issued to assessee on 2-7-2008. Assessee filed reply to said notice on 23-7-2008 and filed return on 30-7-2008. No action was taken AO on assessee's reply and return filed in response to the notice. Later on, after a gap of almost three years, second notice under section 148 was issued to assessee on 29-3-2011. Assessee contended that where proceedings from first notice issued for reopening of assessment were still pending, second notice issued under section 147/148 for reopening was bad in law. Held: It emerged that after issuance of first notice under section 148 on 2-7-2008, no action whatsoever was taken by AO to complete reassessment proceedings. Department went into slumber for almost three years and, thereafter, reinitiated reassessment proceedings in March, 2011 by issuing second notice under section 148 on 29-3-2011. Issuance of second notice under section 148 without completing pending assessment proceedings under section 147 was illegal and subsequent proceedings arising therefrom were vitiated.

Followed:CIT v. P. Krishnankutty Menon, (1990) 181 ITR 237 (Ker) : 1990 TaxPub(DT) 0403 (Ker-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2004-05

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