HIGH
COURT
Commissioner of Income-tax
v.
Laxmi
Narain
M.
M. Kumar and Rakesh Kumar Jain, JJ.
IT
NO. 205 to 207 of 2004
DECEMBER
13, 2007
Section 148, read with section 147, of the Income-tax Act, 1961 – Income escaping assessment – Issue of notice for – Assessment years 1987-88 to 1989-90 – Whether non service of a notice under section 148 on proper person would go to roots and cannot be condoned - Held, yes – Revenue did not serve upon assessee notice under section 148 before framing assessment under section 147 - Tribunal annulled that assessment as invalid - Whether Tribunal was justified in its action - Held, yes
FACTS
The Tribunal annulled the assessment under section 147 for the relevant assessment years holding that after dropping the proceedings under section 147/148 no fresh notice under section l48 was issued to the assessee and without issuance of fresh notice under section 148 the assessment could not withhold the test of validity ignoring that there was no order dropping the proceedings initialed with the issue of notice under section 148 which was served upon the assessee’s brother.
On appeal:
HELD
Non service of a
notice under section 148 before framing of assessment on the proper person
would go to the roots and cannot be condoned. There were categorical findings
of fact recorded by the Tribunal that the revenue had not been able to produce
any material to show that any notice under section 148 was served upon the
assessee in respect of the assessment years under consideration. The Tribunal
had also noticed that the matter was time and again sent back to the Assessing
Officer by the Commissioner (Appeals) and no authority could record positive
and categorical finding that notice under section 148 was served upon the assessee.
It appeared that there was no proof with regard to the service of notice on the
assessee under section 148. The Tribunal had further noticed that proceedings
in respect of the assessment year under consideration were dropped on 31-9-2002
with specific findings by the Assessing Officer that notice under section 148
could not be served. These were pure findings of fact which would not give rise
to any question of law much less a substantive question of law. It is well
settled that issuance of a notice under Section 148 is a condition precedent
for framing the assessment order under Section 147. It is equally well settled
that if no such notice is issued or notice issued is invalid and not in
accordance with law or notice is not served on the proper person, then
assessment framed would be illegal and without jurisdiction. Therefore, the
Tribunal had taken correct view. Accordingly, the appeal was to be dismissed. [