COMMISSIONER OF INCOME TAX Vs. P N KRISHNAKUMAR

JUDGEMENT

(1.) This appeal at the instance of the Commissioner of Income Tax, Cochin raises the following substantial questions of law accepted by this Court while issuing notice to the respondent:

(2.) For the assessment year 1984-85 the assessing authority completed the assessment under S.143(1) of the Income Tax Act on 27.2.1987. Subsequently the assessing authority issued a reassessment notice under S.148 of the Act invoking the power under S.147 of the Act. In that notice, the assessing authority called upon the assessee to file a return of income within 30 days. This was against the Scheme of S.148 of the Act, as it then stood, since the provision at the relevant time insisted on a notice requiring him to furnish a return within such period "not being less than 30 days". The reassessment was completed on 30.3.1993. Aggrieved by that order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals). By order dated 7.2.1995, the Commissioner of Income Tax accepted the contention of the assessee that the notice under S.148 of the Income Tax Act was defective in that the assessee was not given a notice not being less than 30 days, for submitting a return of income. The Commissioner of Income Tax (Appeals) therefore, set aside the revised order of the assessing authority dated 30.3.1993. The appellate authority did not go into the merits of the contentions sought to be raised by the assessee in the appeal. The assessing authority challenged the order of the Commissioner of Income Tax (Appeals) in a further appeal before the Income Tax Appellate Tribunal, Cochin Bench as I.T.A. No. 3400 / Coch / 95. Pending that appeal before the Tribunal, S.148 of the Income Tax Act was amended by the Finance (No.2) Act, 1996 omitting the words "not being less than 30 days" with retrospective effect from 1.4.1989. Thus, when the appeal was taken up for hearing by the Income Tax Appellate Tribunal, there was no insistence by S.148 of the Act, that the notice period should not be less than 30 days. Meanwhile, the assessing authority purported to issue a second notice under S.148 of the Act read with S.147 of the Act giving the assessee a period of not less than 30 days for submitting his return. The assessee submitted his return and the assessing authority completed the assessment by order dated 31.7.1996. That order of assessment was not interfered with in exercise of powers by the Commissioner of Income Tax under S.263 of the Income Tax Act. In that sense the order of reassessment dated 31.7.1996 became final.

(3.) The appeal filed by the assessing authority before the Income Tax Appellate Tribunal challenging the decision of the Commissioner of Income Tax (Appeals) dated 7.2.1995 came up for hearing before the Tribunal. The assessing authority pursued the appeal before the Tribunal presumably on the basis of the amendment brought about to S.148 of the Income Tax Act by Finance (No.2) Act, 1996 with effect from 1.4.1989. On behalf of the assessee it was contended that a fresh proceeding had been initiated under S.147 of the Act and since a reassessment was finally completed by order dated 31.7.1996, the appeal against the order of the Commissioner of Income Tax (Appeals) dated 7.2.1995 had become infructuous. The Income Tax Appellate Tribunal accepted this contention on the side of the assessee and dismissed the appeal filed by the assessing authority on the ground that it has become infructuous. It is feeling aggrieved by this decision of the Tribunal that the Commissioner of Income Tax has filed this appeal under S.260A of the Income Tax Act on the substantial questions of law as indicated above.