ITAT, Visakhapatnam: Notice served u/s 142(1) after end of relevant AY not barred by limitation

ITO, Rajahmundry v. M. Raghava Reddy on 4^th January, 2011

Question before the Hon’ble Tribunal: Whether notice served u/s 142(1) after the end of the relevant Assessment Year is barred by limitation in view of the proviso inserted u/s 142(1)(i)?

Relevant facts: In a matter pertaining to AY 2005-06, the notice u/s 142(1) was issued calling for the return of the assessee. The notice was served on the assessee on 05-09-2007. In the absence of the filing of the return, best judgment assessment was carried out u/s 144. Subsequently, the notice u/s 142(1) was challenged on the ground of limitation.

Allowing the appeal of the Revenue, the Hon’ble Tribunal held that:

(Para 6): “On a plain reading of the above said proviso, one can notice that a notice served under section 142(1) after the end of the relevant assessment year shall be deemed to have been served in accordance with the provisions of sec. 142(1). Thus, the decision rendered by the Special bench in the case of Motorola inc., (Supra) has been nullified by the insertion of the proviso. In the instant case, the impugned notice under section 142(1) has been served upon the assessee on 05-09-2007, i.e. after the insertion of the proviso cited above. Hence, in our view, the said notice shall be deemed to have been validly served in accordance with the provisions of sec. 142(1).”

The decision is available here.