( 1 ) THE appellant-revenue has proposed the following two questions stated to arise out of order dated 11/03/2004 made by Income Tax Appellate Tribunal, Ahmedabad bench b. [i] Whether the Honble ITAT was right in law and on facts in holding that the assessment void ab-initio following the decision of the Tribunal in the case of mrs. C. Malthy (supra) holding that when an assessment is framed u/s. 143 (3) of the act by issuing statutory notice beyond the prescribed time limit, the said assessment is bad in law and has to be quashed, ignoring the fact that the assessee has not challenged the jurisdiction of the A. O. during the course of assessment proceedings on the ground that notice u/s. 143 (2) was served beyond the time limit prescribed under the Act and ignoring the decision of the Madhya pradesh High Court in the case of Dr. H. R. Rai (145 ITR 809)

( 2 ) WHETHER the Honble ITAT was right in law and on facts in holding the decision of the Tribunal in the case of Rakesh S. Maradia Vs. DCIT (2002) 74-ITJ (Ahd) 836, more particularly when the decision of the ITAT in the said case is challenged by way of Tax Appeal No. 420 of 2000, which has been admitted vide order dated 20/12/2002 and is pending before Honble High Court of Gujarat?â½

( 3 ) HEARD Mr. K. M. Parikh, learned Standing Counsel appearing for the appellant-revenue. It is submitted by him that the Tribunal has wrongly confirmed the order of CIT (Appeals) holding that as the notice under section 143 (2) of the Income Tax Act,1961 was issued beyond the statutory time of one year from the end of the month in which the return was filed the assessment was void ab initio. It was urged by him that assessee had not challenged the issuance of notice under section 143 (2) of the Act as being barred by limitation before the Assessing Officer and had raised the challenge before the commissioner (Appeals) only for the first time. It was further submitted that the assessee having participated in the proceedings before the Assessing Officer there was acquiescence and waiver on part of the assessee which would result in the assessment being valid in law and the CIT (Appeals) and the Tribunal were wrong in reading the provisions as being mandatory so as to treat the assessment void ab-initio.

( 4 ) THE contention that the challenge was raised for the first time before the commissioner (Appeals) and not before the Assessing Officer and hence could not have been entertained does not merit acceptance. The position in law is well settled that the Commissioner (Appeals) has the same powers that an Assessing officer has and his powers are co-extensive with that of the Assessing Officer while determining correct income liable to tax in accordance with the provisions of the Act. Even otherwise, the issue raised is purely a legal issue based on provisions of the Act and the assessee can raise the same at any stage.

( 5 ) THE second contention regarding there being acquiescence and/or waiver on part of the assessee by participating in the proceedings also does not merit acceptance. It is an admitted position that the return of income was filed on 30/03/1997 for Assessment Year 1997-98 and the notice under section 143 (2) of the Act came to be issued for the first time only on 20/08/1998. Therefore, the notice was admittedly beyond the period of 12 months which is the statutory period of limitation prescribed under the Proviso to sub-section (2) of Section 143 of the Act.

( 6 ) THE Scheme of the Act broadly permits the assessment in three formats; (i) acceptance of the returned income; (ii) acceptance of returned income subject to permissible adjustments u/s. 143 (1) of the Act by issuance of intimation; and (iii) scrutiny assessment under section 143 (3) of the Act. This Scheme was originally introduced by Direct Tax Laws (Amendment) Act,1989 with effect from 1. 4. 1989. The issuance of notice under section 143 (2) of the Act is in the course of assessment in the third mode, n