Law:

Section:

Section 148 of the Income-tax Act, 1961 - Reassessment - Issue of notice - Assessee filed returns in response to notices under section 148 issued by ITO, Erode - While said returns were pending for disposal, assessee's file was transferred to jurisdiction of ITO, Madras, who issued second notice under section 148 - Whether, while reassessment proceedings were pending, impugned second notice was valid - Held, no FACTS In the case of the assessee, a registered firm carrying on business in purchase and sale of cloth, the ITO had accepted the returns filed for the assessment years 1962-63 and 1963-64. On 30-11-1965 the assessee filed revised returns for both the years. The ITO, Erode, issued notice under section 148 for reopening the assessments on 17-3-1966. In response thereto, the assessee filed returns on 20-5-1966. The ITO took no action within the period of limitation prescribed. While these matters were pending, the assessee's file was transferred to the jurisdiction of the ITO, Madras, who issued another notice under section 148 on 15-10-1968 for both the years. The assessee stated by letter dated 20-3-1973 that the revised returns filed on 30-11-1965 should be taken as the returns in response to the notices. The ITO, Madras, made reassessment orders on 29-3-1973, determining the total income at an enhanced figure. The assessee, on appeal, claimed before the AAC that since the earlier returns filed in pursuance of the notice dated 17-3-1966 issued by the ITO, Erode, were still pending for disposal, the second notice issued on 15-10-1968 was invalid. The AAC accepted the assessee's contention and held the order of the ITO, Madras, as without jurisdiction. On appeal by the revenue, however, the Tribunal held that because of the issue of notice under section 148 by the ITO, Erode, the original assessment proceedings could not be said to have been set at large and that in view of the fact that the assessment order originally made by the ITO, Erode, would be valid till it was revised, the second notice was valid. On reference : HELD It is a settled legal principle that once reassessment proceedings are initiated by the issue of a notice under section 148, the…

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