July 2009
Block assessment : Ss. 158BC and 143(2) of I. T. Act, 1961 : Where the returned income is not accepted in the block assessment, service of notice u/s. 143(2) is necessary. Failure to serve notice u/s. 143(2) would render the block assessment invalid.
By K. B. Bhujle, Advocate
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34. Block assessment : Ss. 158BC and 143(2) of I. T. Act,
1961 : Where the returned income is not accepted in the block assessment,
service of notice u/s. 143(2) is necessary. Failure to serve notice u/s. 143(2)
would render the block assessment invalid.
[CIT vs. Pawan Gupta, 223 CTR 487 (Del).]
In this case the Delhi High Court held as under :
“i) S. 143(2) is a mandatory provision whether one looks
at it from the standpoint of a regular assessment or from the standpoint of
an assessment under Chapter XIV-B.
ii) S. 143(2) has no application in a situation where the
AO, on receipt of return of undisclosed income in Form No. 2B, is satisfied
with the same as reflecting the true state of affairs and no further
information or explanation is called for from the assessee.
iii) However, where the AO is not inclined to accept the
return of undisclosed income filed by the assessee, the procedure prescribed
in Section 143(2) has to be followed. If an assessment order is passed in
such a situation without issuing a notice u/s. 143(2), it would be invalid
and not merely irregular.”
