CIT Vs Super Spinning Mills Ltd. (Madras High Court)
In a recent ruling Hon’ble Madras HC dismissed appeal filed by revenue by holding that assessment in the case of assessee is pending when notice u/s 148 for reassessment was issued which is not sustainable in the eye of law.
Return for AY 2002-03 was filed on 30.10.2002 and an intimation under Section 143(1) was issued on 19.12.2003. A Revised return was filed on 23.03.2004 for which notice u/s 143 (2) can be issued up to 31.03.2005. AO issued notice u/s 148 on 09.07.2004.
Assessee argued that issue in question is directly covered from the decision of this HC in (i) Commissioner Income-tax v. K.M.Pachayappan [(2008) 304 ITR 264]; (ii)Commissioner of Income-tax v. Qatalys Software Technologies Ltd. [(2009) 308 ITR 249] and (iii)Commissioner of Income-tax v. Tcp Ltd. [(2010) 323 ITR 346].
On the other hand, revenue department argued that since Section 147 applies to both assessment and re-assessment, the action of the AO in issuing notice u/s148 cannot be termed illegal and placed reliance upon the judgment of the Supreme Court in Assistant Commissioner of Income Tax v. Rajesh Jhaveri Stock Brokers Private Limited [(2007) 291 ITR 500]
After considering submission from both sides Hon’ble HC have held that issuance of notice under Section 143(2) will apply only in the case of pending assessment. This is a case where the assessment is pending and instead of completing the same, the assessing authority has initiated proceedings for re-assessment.
