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March 2012

Reassessment: Sections 143(2), 143(3), 147 and 148 of Income-tax Act, 1961: A.Y. 2003- 04: Assessment u/s.147 cannot be made within the time available for issuing notice u/s.143(2) and for completion of assessment u/s.143(3).

By K. B. Bhujle, Advocate
Reading Time 1 mins
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[CIT v. ABAD Fisheries, 246 CTR 513 (Ker.)]

For the A.Y. 2003-04, the Assessing Officer accepted the returned income u/s.143(1) of the Income-tax Act, 1961. Subsequently, even before the expiry of the period for issuing the notice u/s.143(2) for completing the assessment u/s.143(3) the Assessing Officer issued notice u/s.148 holding that income chargeable to tax has escaped assessment and passed an assessment order u/s.147. The Tribunal allowed the assessee’s claim and cancelled the assessment and held that within the time provided for regular assessment u/s.143(3) after issuing notice u/s.143(2), no reassessment u/s.147 is permissible under the Act.

On appeal by the Revenue the Kerala High Court upheld the decision of the Tribunal and held as under:

“(i) Reassessment u/s.147 cannot be completed within the time available for issuing notice u/s.143(2) and for completion of assessment u/s.143(3).

(ii) Similar view taken by the Madras and the Delhi High Courts remains unchallenged by the Department. The Departmental appeal is dismissed.”

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