2018 (11) TMI 1839 - HC - Income Tax

Reopening of assessment u/s 147 - no notice u/s 148 of the Act has been served upon the petitioner - HELD THAT - As submitted that in the absence of service of statutory notice under section 148 of the Act, continuance of the proceedings under section 147 of the Act is without any authority of law. In support of his submission, learned advocate has placed reliance upon the decision of the Delhi High Court in the case of Commissioner of Income Tax (Central)-I v. Chetan Gupta, 2015 (9) TMI 756 - DELHI HIGH COURT wherein the Court has held that burden to establish that service of notice has been effected on the assessee or his duly authorized representative is on the revenue. Having regard to the submissions advanced by the learned advocate for the petitioner, issue NOTICE returnable on 7.1.2019. By way of ad-interim relief, further proceedings pursuant to the impugned notice are hereby stayed. Direct service is permitted.

Summary

Issues Involved:
Reopening of assessment under section 147 of the Income Tax Act, 1961 without serving notice under section 148.

Analysis:

The judgment delivered by the Gujarat High Court pertains to the reopening of assessment for the assessment year 2011-12 under section 147 of the Income Tax Act, 1961, without serving a notice under section 148 upon the petitioner. The petitioner's advocate argued that the continuation of the reopening proceedings without serving the statutory notice is without any legal authority. The advocate relied on a decision of the Delhi High Court in the case of Commissioner of Income Tax (Central)-I v. Chetan Gupta, (2015) 62 taxmann.com 249 (Delhi), which held that the burden to establish the service of notice lies with the revenue. This issue raises a fundamental question regarding the validity of the proceedings initiated by the assessing officer without complying with the mandatory requirement of serving a notice under section 148 of the Act.

In response to the submissions made by the petitioner's advocate, the Gujarat High Court issued a notice returnable on a specified date, granting ad-interim relief by staying further proceedings pursuant to the impugned notice. The court allowed direct service in this matter, indicating a cautious approach towards the petitioner's contention regarding the absence of a notice under section 148. This interim relief signifies the court's acknowledgment of the potential legal implications of proceeding with the assessment without serving the requisite notice, highlighting the importance of adhering to procedural requirements laid down in the Income Tax Act, 1961.

The judgment underscores the significance of procedural compliance in tax matters, emphasizing the need for strict adherence to statutory provisions, particularly concerning the initiation of assessment proceedings under section 147 of the Income Tax Act, 1961. By granting interim relief and issuing a notice to the concerned parties, the court has demonstrated a commitment to ensuring fair and lawful proceedings, thereby upholding the principles of natural justice and procedural fairness in matters of tax assessment. The decision reflects a judicial stance that prioritizes legal formalities and due process, safeguarding the rights of taxpayers and maintaining the integrity of the assessment process under the Income Tax Act, 1961.