The Commissioner of Income Tax vs M. Chellappan and P.L. Gandhi

P.D. Dinakaran, J.—The revenue is the appellant in these appeals filed against the order of the Income Tax Appellate Tribunal Madras ''B''

Bench dated 16.9.2003 made in I.T.A. Nos. 609, 610 and 611/Mds/2003 and I.T.A. Nos. 617, 618 and 619/Mds/2003.

2.1 Brief facts of the case, so far as they are relevant are as under:

The assessees'' filed returns of income and the same were processed u/s 143(1)(a) of the Income Tax Act (for brevity ""the Act""). The assessees''

derived income from property and share income from firms. Subsequently, the Assessing Officer issued notices u/s 148 of the Act finding that the

assessees claimed excessive deductions u/s 24(1)(vi) of the Act while computing income from property. The Assessing Officer disallowed the

excess claim made by the assessees.

2.2. Aggrieved by the proceedings of the Assessing Officer, the assessees preferred further appeals before the Commissioner of Income Tax

(Appeals), who confirmed the order of the Assessing Officer.

2.3. As against the order of the Commissioner of Income Tax (Appeals), further appeals were preferred by the assessees before the Income Tax

Appellate Tribunal Madras ''B'' Bench. The Tribunal, finding that the notices u/s 143(2) of the Act were issued to the assessees beyond the period

prescribed under the said provision, held that the assessment orders are vitiated and therefore, set aside the same.

2.4. Against the said orders of the Tribunal, the revenue has preferred these appeals on the following substantial questions of law:

Whether on the facts and in the circumstances of the case the Income Tax Appellate Tribunal was right in holding that the reopening of the

assessment u/s 147 of the Act and completion of assessment without issue of notice u/s 143(3) of the Act within 12 months is not valid?

The Punjab & Haryana High Court in Vipin Khanna Vs. Commissioner of Income Tax and Others, held where no notice u/s 143(2) of the Act

had been served on the assessee within the stipulated period and the return as such had become final, in view of the amendment made in Section

147 of the Act with effect from 1st April, 1989, the Assessing Officer could not only assess or reassess the escaped income in respect of which

proceedings u/s 147 of the Act have been initiated, but also any other income chargeable to tax which may have escaped assessment and which

comes to his knowledge subsequently, in the course of such proceedings.

In the instant case, admittedly, no notices u/s 143(2) of the Act were served on the assessees within the stipulated period of twelve months and

therefore, the proceedings u/s 143 of the Act come to an end and the matter becomes final. Hence, applying the ratio laid down by the Punjab &

Haryana High Court in Vipin Khanna Vs. Commissioner of Income Tax and Others, , we are of the view that no substantial question of law arises

for our consideration in these appeals. Accordingly, these appeals are dismissed. No costs. Consequently, connected T.C.M.P. Nos. 445 to 447

of 2004 are also dismissed.

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