M.Y. Eqbal ORDER
1. Application for impleadment is allowed.
2. Delay condoned.
3. Leave granted.
4. This appeal by special leave is directed against the judgment and order passed by the High Court of Sikkim at Gangtok in Writ Petition(C) No. 44 of 2009, dated 05.10.2010. By the impugned judgment and order, the High Court has quashed the order of assessment passed by the Assistant CIT, Circle-I, Siliguri under Section 148 of the Income Tax Act, 1961 (for short 'the Act') dated 11.12.2009, whereby the assessing authority has confirmed the notices issued under Section 148 of the Act for the Assessment Years 1995-1996 and 1996-1997, respectively.
5. The facts in brief are: The Assessee is a Sikkim based non-Sikkimese who had filed his first return of income for Assessment Year 1997-1998. Upon assessment, it was discovered that he had a net profit of Rs. 5,78,832/- during the Assessment Year 1996-1997 relevant to the Assessment Year 1995-1996. Since no return was filed by the Assessee for the Assessment Year 1996-1997 despite capitalizing the aforesaid profit, proceedings under Section 147 of the Act were initiated against him for the said Assessment Year. Accordingly, on 26.05.1998 the notice was issued under Section 148 of the Act. Further, the Revenue has found out that as on 31.03.1996 the Assessee had brought forward closing capital of Rs. 1,73,90,397/- including the aforesaid net profit during the Assessment Year 1996-1997. The same remained unexplained as the return of income for Assessment Year 1995-1996 was also not furnished by the Assessee. Hence, another notice under Section 148 was issued to the Assessee for the Assessment Year 1995-1996, dated 30.03.2000. It has come on record that the Assessee did not comply with the aforesaid notices issued under Section 148 of the Act and thus, a letter dated 19.01.2001 came to be issued to the Assessee as a reminder to file his return of income for the assessment years clearly mentioning that failure to do so would lead to an ex-parte assessment under Section 144 of the Act. Thereafter, upon filing of written submissions by the Assessee, notice under Section 142(1) of the Act dated 25.06.2001 was issued for the Assessment Year 1995-1996 alongwith final show cause fixing compliance for hearing dated 09.07.2001. The Assessee sought for an adjournment which was not granted and the assessments were completed ex-parte under Section 144 of the Act raising a tax demand of Rs. 2,45,87,625/- and Rs. 6,32,972/- for Assessment Years 1995-96 and 1996-97, respectively by orders dated 09.07.2001 and 28.03.2001, respectively. Further, penalty proceedings under Section 271(1)(c) of the Ac........