2022 (1) TMI 1281 - HC - Income Tax

Reopening of assessment u/s 147 - statutory obligation of observing the formality of Section 148A not complied with - HELD THAT - It is an admitted position and undeniable fact that in this case statutory formalities of Section 148A of the Income Tax has not been observed by the AO before issuing notice u/s 148 and the learned Counsel for the petitioners in support of his contention has relied on my own order passed in Bagaria Properties and Investments Private Limited Anr. vs. Union of India Ors. 2021 (8) TMI 788 - CALCUTTA HIGH COURT which is on the same fact and same issue where Income Tax Authorities had not complied with statutory obligation of observing the formality of Section 148A of the Income Tax Act, 1961. We direct the respondents to file affidavit-in-opposition by 10th January, 2022. Petitioner to file reply thereto, if any, by 13th January, 2022. List the matter for hearing on 17th January, 2022.

Summary

Issues:
1. Challenge to notice under Section 148 of the Income Tax Act, 1961 for assessment year 2016-17.
2. Compliance with mandatory provisions of Section 148A of the Act before issuing notice.
3. Constitutional validity of the Taxation and Other Law (Relaxation and Amendment of Certain Provisions) Act, 2020.

Analysis:
1. The petitioner challenged the notice dated 28th June, 2021, issued under Section 148 of the Income Tax Act, 1961, for the assessment year 2016-17. The ground of challenge was the non-compliance with the mandatory provisions of Section 148A of the Act by the Assessing Officer before issuing the notice. The petitioner contended that the statutory obligation under Section 148A had not been observed, raising a substantial legal issue regarding the validity of the notice.

2. The petitioner also contested the constitutional validity of the Taxation and Other Law (Relaxation and Amendment of Certain Provisions) Act, 2020. This additional challenge introduced a complex legal dimension to the case, questioning the constitutionality of the legislative provisions impacting the taxation process. The Court was presented with the task of evaluating the constitutionality of the relevant provisions in light of the petitioner's arguments.

3. The Court noted the absence of compliance with the statutory formalities of Section 148A of the Income Tax Act by the Assessing Officer before issuing the impugned notice. The petitioner's counsel referenced a previous order passed by the Court in a similar case where the Income Tax Authorities had similarly failed to adhere to the statutory obligations of Section 148A. This reference established a pattern of non-compliance, strengthening the petitioner's argument regarding the procedural irregularities in issuing the notice under Section 148.

4. In light of the submissions made by the parties, the Court directed the respondents to file an affidavit-in-opposition by a specified date, allowing the petitioner to respond accordingly. The matter was scheduled for a hearing on a later date, indicating the Court's intention to thoroughly examine the legal issues raised by the petitioner. Additionally, the Court issued a restraining order, preventing the respondents from taking any further action based on the challenged notice until the matter was resolved through the legal proceedings.

This detailed analysis highlights the key legal issues raised in the judgment, including challenges to the notice under Section 148, compliance with statutory provisions, and the constitutional validity of relevant legislation. The Court's directions and observations provide insight into the procedural and substantive aspects of the case, emphasizing the importance of adherence to statutory requirements in the taxation process.