Bombay H.C : the valid notice under s. 143(2) was not issued before the expiry of period of limitation

High Court Of Bombay

Metro Auto Corporation vs. ITO & ORS.

Section 148

Asst. Year 1999-2000

H.L. Gokhale & V.R. Kingaonkar, JJ.

Writ Petn. No. 1530 of 2006

24th July, 2006

Counsel Appeared : Arun Sathe I/b Mandar Vaidya, for the Petitioner : S.M. Shah, for the Respondents

JUDGMENT

By the court :

Rule.

Rule is made returnable forthwith. Counsel are heard. The income of the petitioner was assessed for the asst. yr. 1999-2000 and the Asstt. CIT, who assessed the income, held that the assessee had reduced Rs. 2,00,000 on account of old stocks, but there was no justification to it. He, therefore, made addition of Rs. 2,00,000 while making the assessment. This order was carried in appeal to the CIT(A). The appeal was allowed by the CIT(A) vide his order dt. 10th Oct., 2003. The Revenue carried a further appeal to the Tribunal and that appeal is pending. During the pendency of this appeal filed by the Revenue, a notice has been issued to the petitioner on 13th Feb., 2006 under s. 148 of the IT Act, 1961. It is this notice which is under challenge in the present petition. Mr. Sathe, learned counsel appearing for the petitioner, points out that when the proceedings filed by the Department are pending and when the order impugned in the appeal before the Tribunal is in favour of the assessee, surely, the notice under s. 148 that the income has escaped and that further action will be taken, cannot be issued. Mr. Shah, learned counsel appearing for the respondents, points out that the decision of the CIT (A) is not on facts and it is only on the ground that the valid notice under s. 143(2) was not issued before the expiry of period of limitation. Be that as it may, the fact remains that the decision of the AO was interfered by the CIT(A) and that is the order which presently survives. During the pendency of the further proceedings, obviously the impugned notice could not have been issued. Mr. Sathe has relied upon a decision of this Court in the case of Ador Technopack Ltd. vs. Dr. Zakir Hussein, Dy. CIT & Ors. (2004) 191 CTR (Bom) 500 : (2004) 271 ITR 50 (Bom) to the effect that during the pendency of such proceedings the assessment could not be treated as final. In the circumstances, we allow the petition and quash and set aside the notice dt. 13th Feb., 2006. Accordingly, rule is made absolute as above. No order as to costs. In the event the Revenue succeeds, it will be open to the Revenue to take further appropriate steps.

[Citation : 286 ITR 618]

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