Law:

Section:

Section 256, read with section 148, of the Income-tax Act, 1961 - Reference - Question of fact - Assessment year 1982-83 - ITO issued a notice under section 148 to assessee and assessed it to tax accordingly - Commissioner (Appeals) having found that no reasons under section 148(2) were recorded by ITO before issuing said notice held that assessment in pursuance of such a notice was not valid and he set aside assessment with direction that same should be made de novo after affording an opportunity to assessee - Tribunal held that since ITO had not recorded reasons under section 148(2), entire proceedings for assessment were void and Commissioner (Appeals) erred in setting aside assessment for fresh assessment and accordingly it quashed assessment order - Whether any question of law arose from order of Tribunal Held, no FACTS The ITO, having found the return filed by the assessee to be defective required the assessee to amend the return and to rectify the defects and as the assessee did not do so the ITO issued a notice under section 148 to the assessee to bring to tax the income of the year in question. On appeal the Commissioner (Appeals) having found that no reasons under section 148(2) were recorded by the ITO before issuing notice under section 148 held that the assessment in pursuance to such a notice was not valid and he set aside the assessment with the direction that the same should be made de novo after affording an opportunity to the assessee. On second appeal, the Tribunal held that since the ITO had not recorded his reasons under section 148(2), the entire proceedings for assessment were void and the Commissioner (Appeals) erred in setting aside the assessment for fresh assessment and accordingly it quashed the assessment order holding it be illegal and non est. It also rejected the revenue's reference application under section 256(1). On an application for reference under section 256(2): HELD Section 148( 2) says the ITO shall before issuing any notice under this section record his reasons for doing so. Thus, it was imperative for the ITO to have recorded his reasons as required by section 148(2 ) before initiating reassessment proceedings. The…

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