2023 (2) TMI 1150 - HC - Income Tax

Validity of reopening of assessment - effect of newly inserted Section 148A - second consecutive notice when first notice is set aside - HELD THAT - It appears from record annexed to this writ petition that relating to the same assessment year notice under Section 148 of the Income Tax Act, 1961 dated 23rd June, 2021 was quashed by the order of this Court 2021 (11) TMI 1156 - CALCUTTA HIGH COURT by which the whole proceeding was set aside on the ground that before coming into effect newly inserted Section 148A of the Act from April, 2021, already reassessment was completed and order u/s 147/143(3) of the Act was passed on 18th June, 2019 which is also much prior to the order of the Hon ble Supreme Court dated 4th May, 2022 in the case of Union of India vs. Ashish Agarwal 2022 (5) TMI 240 - SUPREME COURT . In spite of the adverse remarks passed by this Court against the said assessing officer in earlier order of this Court dated 10th November, 2021 for issuing earlier notice dated 23rd June, 2021, u/s 148 of the Act, relating to the same assessment year, the very same assessing officer named Bitan Roy, Ward 5(1) Kolkata has issued the second impugned notice for reopening against already reassessed order in defiance of the order of this Court and which is contumacious also. Conduct of the officer as appears that he is not mentally in a position to discharge his duty and that the reason best known to him as appears from his conduct that he is harassing the petitioner by inviting for this unnecessary litigation and cost of which is to be incurred by the petitioner and by the Government also from public exchequer for defending such type of cases. Income Tax Authority is not in a position to defend the conduct of the Assessing Officer and justify the issuance of the impugned notice under Section 148A(b) and order under Section 148A(d) of the Act after the reassessment was completed long back i.e. prior to newly amended Section 148A of the Act and judgment of the Hon ble Supreme Court in the case of Ashish Agarwal (supra). Considering the facts and circumstances of this case, the impugned order dated 26th May, 2022 under Section 148A(b) of the Act and subsequent order under Section 148A(d) along with notice under Section 148 dated 23rd July, 2022 are quashed WP is disposed of by allowing the same and imposing a cost of Rs. 10,000/- on the assessing officer Mr. Bitan Roy to be paid to the petitioner from his salary within a period of two weeks.

Summary

Issues:
Challenging notice under Section 148A(b) of the Income Tax Act, 1961 and subsequent order under Section 148A(d) for assessment year 2013-14. Violation of court order quashing previous notice under Section 148 for the same assessment year. Justification of the conduct of the Assessing Officer. Quashing of the impugned orders and imposition of costs.

Analysis:

The petitioner challenged the notice dated 26th May, 2022 under Section 148A(b) of the Income Tax Act, 1961, and the subsequent order dated 23rd July, 2022 under Section 148A(d) issued for the assessment year 2013-14. The petitioner contended that a previous notice under Section 148 for the same assessment year had been quashed by the Court in a prior order. The Court noted that the reassessment for the year had been completed before the newly inserted Section 148A came into effect in April 2021. The conduct of the Assessing Officer, Bitan Roy, was severely criticized for issuing the impugned notice in defiance of the Court's previous order, indicating contumacious behavior. The Court observed that the officer's actions seemed to be causing unnecessary harassment to the petitioner, leading to additional litigation costs incurred by both the petitioner and the Government.

The respondent, representing the Income Tax Authority, failed to provide a valid defense for the conduct of the Assessing Officer and the justification for issuing the impugned notice under Section 148A(b) and subsequent order under Section 148A(d) after the reassessment had already been completed long before the amendments to Section 148A and the relevant Supreme Court judgment. In light of these circumstances, the Court quashed the impugned orders dated 26th May, 2022 and 23rd July, 2022 under Section 148A(b) and Section 148A(d) respectively.

Consequently, the writ petition (WPO 213 of 2023) was allowed, and a cost of Rs. 10,000/- was imposed on the Assessing Officer, Mr. Bitan Roy. The Court directed the amount to be paid by Mr. Bitan Roy to the petitioner from his salary within two weeks. Additionally, the Ministry of Law and Justice was instructed to forward a copy of the order to the Principal Chief Commissioner of Income Tax - I, Kolkata for necessary action.