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October 2012

Reassessment: Notice u/s. 148 to be issued for each year separately: AO issuing combined notice for all four years: Reassessment not valid.

By K. B. Bhujle, Advocate
Reading Time 1 mins
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[Mohd. Ayub Vs. ITO; 346 ITR 30(All.)]

For the A. Ys. 1994-95 to 1997-98, the Assessing Officer issued a combined notice u/s. 148 of the Income-tax Act, 1961 and passed reassessment orders. The Tribunal upheld the validity of the notice and the reassessment order.

On appeal by the assessee, the Allahabad High Court reversed the decision of the Tribunal and held as under:

 “i) Each assessment year is an independent unit of assessment and the provisions of the Act applied separately. Even where there had been escapement of income, the Assessing Officer was obliged to issue a separate notice for each assessment year.

ii) He had not issued a separate notice u/s. 148 of the Act and instead had issued a composite notice which did not meet the requirement of section 148 of the Act. Thus the entire reassessment proceedings were wholly without jurisdiction.”

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