IMPORTANT POINT
Procedural amendments to the Income Tax Act apply retrospectively, affecting the validity of notices issued under the Act.

JUDGMENT :

Gopinath P., J.

The petitioner is an assessee under the Income Tax Act, 1961 (hereinafter referred to as ‘the 1961 Act’). For the assessment year 2007-08, the petitioner filed his return of income on 18.5.2007. The petitioner was served with Ext.P1 notice under Section 143(2)(ii) of the 1961 Act, on 22.8.2008. Thereafter, the assessing authority proceeded to issue Ext.P3 order of assessment under sub-section (3) of Section 143, on 30.12.2009, assessing the total income of the petitioner to be Rs.15,28,500/- (Fifteen lakhs twenty-eight thousand five hundred only) and proceeded to demand an amount of Rs.6,09,632/- (Six lakhs nine thousand six hundred thirty-two only) with surcharge, education cess and interest under Section 234 up to the date of the order. Being aggrieved by Ext.P3 order, the petitioner approached the Commissioner by filing Ext.P4 revision petition under Section 264 of the 1961 Act, taking up a contention that the notice issued to the petitioner under Section 143(2)(ii) of the 1961 Act was beyond the time prescribed in the first proviso to Section 143(2)(ii) which provided that no notice as contemplated by that provision shall be served on the assessee after the expiry of 12 months from the end of the month in which the return is furnished. However, by Ext.P7 order, the revision petition filed by the petitioner was dismissed by the Commissioner. The contention of the petitioner that notice under Section 143(2)(ii) was beyond the time prescribed to the first proviso of that provision was rejected by the Commissioner on the basis of the amendment to the proviso by the Finance Act, 2008 with effect from 1.4.2008. The petitioner is thus before this Court contending that the proceedings culminating in Ext.P3 order of the assessing authority and Ext.P7 order of the revisional authority for the assessment year 2007-08 are illegal and unsustainable in law on the ground that notice under Section 143(2)(ii) of the 1961 Act was issued beyond the time prescribed in the first proviso to Section 143(2)(ii) of the 1961 Act as it stood prior to its amendment with effect from 1.4.2008 by the Finance Act, 2008.

2. Sri. T.R. Rajan, the learned counsel appearing for the petitioner would submit that it is settled law that the assessment for a particular assessment year has to be completed with reference to the law as it stood on the 1st of April of the relevant assessment year. It is submitted that the proviso to Section 143(2)(ii) of the 1961 Act as it stood on 1.4.2007 contemplated that no notice under Section 143(2)(ii) could be issued after the expiry of 12 months from the end of the month in which the return is furnished. It is submitted that in the facts and circumstances of this case, the return for the assessment year 2007-08 was furnished by the petitioner on 18.5.2007 and the last date for issuing a notice under Section 143(2)(ii) would therefore be 17.5.2008. It is pointed out that Ext.P1 notice was issued only on 8.8.2008 and therefore, the entire proceedings following Ext.P1 notice are clearly without jurisdiction. The learned counsel placed reliance on the judgment of the Supreme Court in Karimtharuvi Tea Estate Ltd. v. State of Kerala; (1966) 60 ITR 262 (SC) to contend that the law applicable to the assessment year 2007-08 would be the law as on 1.4.2007 and the amendment to the proviso to Section 143(2) (ii) of the 1961 Act by the Finance Act, 2008 with effect from 1.4.2008 cannot apply. The learned counsel appearing for the petitioner also relies on the judgment of the Allahabad High Court in Tulsi Food Products v. Deputy Commissioner of Income-Tax and another; (2016) 380 ITR 192 (All) where an identical question was considered by a Division Bench of the Allahabad High Court and it was held that for the assessment year 2007-08 the amendment to the proviso to Section 143(2)(ii) with effect from 1.4.2008 would not apply.

3. Sri. Jose Joseph, the learned Standing Counsel appearing for the respondent Department w