COMMISSIONER OF INCOME TAX CHENNAI Vs. C MALATHY

JUDGEMENT

(1.) (PRAYER: Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961, against the order dated 30.4.2003 in ITA No.1127/Mds/2002 on the file of the Income Tax Appellate Tribunal, Chennai 'A' Bench.) The appeal by the Revenue raises the following question of law viz:

(2.) THE appeal relates to the Assessment Year 1996-97. It is seen that the assessee filed her return of income on 16th July 1998. It is seen that pursuant to the notice under Section 148, the assessee filed the return of income on 16th July 1998. THE original assessment under Section 143(3) in respect of the assessee's husband was completed on 31.3.1999. It was noticed during the course of assessment proceedings that the applicant and her husband had jointly purchased a property on 26.10.1995; that they had paid Rs.6,00,000/- originally and the balance was to be paid at the time of registration. On verification of the books of accounts of the assessee, the Officer found that the source of funds for the purchase of the property was stated to be on loans received from the creditors. On enquiry, it was found that while some of the creditors could not be verified, the others were found to be not genuine. THE Assessing Officer noted that in spite of several opportunities granted, the claim was not substantiated by the assessee.

(3.) A reading of Section 143(2) as it then stood at the relevant point of time shows that where a return has been made under Section 139 or in response to a notice under Section 142(1), no notice under the sub section shall be served after the expiry of twelve months from the end of the month in which the return is furnished. In the decision reported in 281 ITR 444 (COMMISSIONER OF INCOME TAX Vs. M.CHELLAPPAN), this Court held that where no notice was served within the stipulated period of twelve months, the proceedings under Section 143 came to an end and the matter attained finality. The decided case related to a case of an assessment under Section 147 of the Income Tax Act. This Court also referred to the decision of the Punjab & Haryana High Court reported in 255 ITR 220 (VIPAN KHANNA Vs. C.I.T.), wherein it was held that where notice under Section 143(2) had not been served on the assessee within the stipulated time and the return filed pursuant to the notice under Section 148, the matter had attained finality; therefore, the proceeding under Section 143 had come to an end.