SUB: Difference in Years in notice and Assessment.
On 26.03.2009, a notice u/s 147 I. Tax Act got by the assessee for the A.Y. 2002-2003, and after hearing, Order dated 15.12.2009 by Ld ITO was passed for A.Y. 2007-2008 by not allowing cash credits of some creditors who have not attended office u/s 131 notice in the income of assessee and demand notice was also issued For A.Y. 2007-2008. The assessee appealed and that was accepted by setting aside order dt 15.12.2009 by Ld Commissioner of appeal on the merit ground that it was not fault of assessee if creditors did not appear and all the transactions were through banking channel and all amounts of repaid by a/c payee cheques also. But did not give any reason about notice of A.Y. 2002-2003 while Order is For A.Y. 2007-2008. Now Department is in appeal at tribunal. Assessee also filed cross objection vide Form no. 36 A dated 16.10.2010 in which one of the ground is that Notice is for A.Y.2002-2003 and Assessment Order is For A.Y 2007-2008, so it is null and void. A/r took two adjournments at Tribunal on 06.3.2011 and 30.05.2011. Next Date now is 21.07.2011. In the meantime assessee got on 01.06.2011 ITO letter dated 27.05.2011 calling it CORRIGENDUM that there was mistake in a.y. and it is now rectified that A.Y. 2002-2003 should be read in stead of 2007-2008. Let me know law on this point and any ruling if possible.
1 Answer from Attorneys
As per Section 148 earlier assessment can be reopened by issue of notice on or after 1-4-2008 but before 1-4-2009 will be:
(a) Asst year 2004-05 where escaped income is less than 1 lakh
(b) Asst Year 2002-03 where escaped income is 1 lakh or more
Section 147 is for time limit for completion of assessment or re-assessment. In case of reassessment the assessment proceeding have to be completed within 1 years from the end of FY in which notice U/s. 148 was issued.
I think in your case notice issued on 26-3-2009 is U/s. 148 for A.Y. 2002-03. The AO cannot pass order for AY 2007-08 by issue of notice for AY 2002-03. The order passed for AY 2007-08 is null and void. The AO also cannot issue Corrigendum on 27-5-2011 that is after the completion of entire assessment proceedings stating that there was mistake in AY which show that the AO has not applied is mind while issuing notice.
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