Reassessment — Notice u/s 148 — Validity — Assessment not finalised in pursuance of return of income — Notice u/s 148 issued before issuing notice u/s 143(2) for assessment u/s 143(3) — Impermissible

Reassessment — Notice u/s 148 — Validity — Assessment not finalised in pursuance of return of income — Notice u/s 148 issued before issuing notice u/s 143(2) for assessment u/s 143(3) — Impermissible

The assessee showed the investment in a plot of land at a certain value in his return of income filed on 6th December, 1999. The Assessing Officer processed the return u/s 143(1)(a) of the Income-tax Act, 1961 on 11th August, 2000. Thereafter, the assessee revised the balance sheet and profit and loss account on 16th August, 2000 enhancing the investment in such property. The Assessing Officer issued a notice u/s 148 on 14th September, 2000, based on the revised balance sheet filed by the assessee and then issued a notice u/s 143(2) on 3rd October, 2000.

In appeal, the assessee challenged the validity of the notice u/s. 148. The Tribunal upheld the issuance of notice u/s 148 though the Assessing Officer could have issued a notice u/s 143(2) to make the regular assessment u/s 143(3).

The Rajasthan High Court allowed the appeal filed by the assessee and held as under:

“i) The order u/s 143(1)(a) was confirmed on 11th August, 2000 when the return was filed and the notice u/s 148 came to be issued before the assessment could have been done.

ii) The Tribunal had committed an error in upholding the notice issued u/s 148.”