Income Tax - block assessment - Sec 143(2) notice to have mandatory application once Revenue repudiates return and proceeds to make inquiry: Supreme Court
INCOME Tax Search is an age-old practice to curb tax evasion. However, there has been consistent infusion of elements of natural justice in the way the Revenue completes the block assessment in addition to regular assessment. Rejecting a return filed under block assessment and proceeding to make inquiry is a substantive action on part of the Revenue but whether a notice u/s 143(2) is procedural or mandatory has been a bone of contention for quite some time. However, the controversy has now been put at rest by the Apex Court which has held that once the Revenue repudiates the return and proceeds to make inquiry, a notice u/s 143(2) is mandatory in the scheme of provisions for completing assessment u/s 143(3). The non-issue of notice is no way a procedural lapse which can be cured.