Initiation of reassessment during pendency of Sec. 143(2) proceedings is invalid

Pradeep Sharma Vs. DCIT (ITAT Delhi)

It is settled law that unless the return of income already filed is disposed of, notice for reassessment under section 148 of the Income Tax Act, 1961, cannot be issued, i.e., no reassessment proceedings can be initiated so long as assessment proceedings pending on the basis of the return already filed are not terminated.

If the assessment is not framed before the expiry of the period of limitation for a particular assessment year, it would have to be assumed that since proceedings had not been opened under section 143(2), the return had been accepted as correct. It may be argued that thereafter recourse could be taken to section 147, provided fresh material had been received by the assessing officer after the expiry of limitation fixed for framing the original assessment. So far as the present case is concerned we are of the view that it is evident that, faced with severe paucity of time, the assessing officer had attempted to travel the path of section 147 in the vain attempt to enlarge the time available for framing the assessment. This is not permissible in law.

Full Text of the ITAT Order is as follows:-