N. Ahamed Ali vs The Income Tax Officer

R. Sudhakar, J.—The present tax case appeal, at the instance of the assessee, raises the following substantial questions of law for

consideration:-

''(1) Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessment is valid even though no notice

under Section 143(2) was issued, contrary to the decision of the Apex Court in the case of Assistant Commissioner of Income Tax and Another

Vs. Hotel Blue Moon, wherein it was held that issuance of notice under Section 143(2) is mandatory?

(2) Whether on the facts and in circumstances of the case, the issuance of notice under Section 143(2) of the Income Tax Act, 1961 within the

prescribed time limit for the purpose of making the assessment under Section 143(3) of the Income Tax Act, 1961 is mandatory?

(3) Whether the Tribunal was right in law in upholding additions, where the discrepancy arose because the quantum of income and assets shown in

the return of income were more than the figures in the books of accounts?

It is a case of assessment under Section 143(3) read with Section 253 without the issuance of the mandatory notice under Section 143(2) of the

Income Tax Act, 1961. When the assessee preferred an appeal against the order of the assessing officer on the ground that no notice was issued

under Section 143(2), the Commissioner of Income Tax (Appeals) held in favour of the assessee. On a challenge to the said order by the

department before the Tribunal, placing reliance upon the decision of this Court in Areva T and D India Limited, (formerly known as ALSTOM

Ltd.) Vs. The Assistant Commissioner of Income Tax, , the Tribunal set aside the order of the Commissioner of Income Tax (Appeals) and

remanded the matter to the assessing officer. The said order of the Tribunal was challenged before this Court in W.P. No.4885 of 2009 and the

writ petition was allowed directing the writ petitioner to take steps to bring the legal representatives of the deceased assessee on record before the

Tribunal. Thereafter, when the proceedings continued before the Tribunal, the decision of the Supreme Court in Assistant Commissioner of Income

Tax and Another Vs. Hotel Blue Moon, was relied upon by the assessee for the proposition that the issuance of notice under Section 143(2) is

mandatory and the omission is not curable. Nevertheless, the Tribunal, following the decision of this Court in Areva T and D India Limited,

(formerly known as ALSTOM Ltd.) Vs. The Assistant Commissioner of Income Tax, , remanded the matter to the assessing officer, against which

the appellant has filed the present appeal.

Heard the learned counsel for the parties.

The question that arises for consideration is whether the proceedings of the department for the purpose of assessment under Section 143(3)

would be justified without the issuance of the mandatory notice under Section 143(2) of the Income Tax Act?

The issue is no longer res integra, as we have also recently in T.C.(A)Nos.582 and 583 of 2014 dated 15.9.2014 (Commissioner of Income

Tax, Trichy v. M/s. Fathima Thanga Maaligai, Karaikal), placing reliance on the decision of the Supreme Court in Assistant Commissioner of

Income Tax and Another Vs. Hotel Blue Moon, as well as the decision of a Division Bench of this Court in T.C.(A)No.159 of 2006 dated

17.7.2012 (Sapthagiri Finance & Investments v. Income Tax Officer) held that the issuance of notice under Section 143(2) is mandatory. In such

view of the matter, we set aside the order of the Tribunal and answer the substantial questions of law in favour of the assessee and against the

Revenue. The tax case appeal stands allowed. No costs.