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Judgment
The respondent filed a writ petition challenging the initiation of the proceedings by issue of notices under Section 143(2) of the Income Tax Act, 1961. The contention put forth on behalf of the respondent before the High Court was that there has been an assessment made under Chapter XIV-B and therefore, it is not open to the Department to initiate the proceedings whatsoever under Section 143 of the Income Tax Act. The High Court took note of the fact that there cannot be two assessments for the same assessment year on an assessee and once an assessment has been framed for a block period under Section 158-BC which includes the years in question, the Income Tax Officer stands debarred from framing an assessment under Section 143 on the basis of returns already filed under Section 139. On this basis the High Court quashed the notices issued to the respondent. The Department aggrieved by the said order is in appeal before this Court.
It is brought to our notice that by Finance (No. 2) Act, 1998, an Explanation has been added to Section 158-BA and the Department places strong reliance upon this Explanation. The High Court when it rendered its judgment did not have the benefit of considering this Explanation. In the circumstances we think it would be appropriate to set aside the order made by the High Court and remit the matter for a fresh consideration in accordance with law. The proceedings before the High Court shall stand restored to its original file and the matter shall be disposed of in the light of what we have stated above.
The appeal is allowed accordingly. No costs.