2022 (12) TMI 1423 - HC - Income Tax

Validity of reopening of assessment - notice issued u/s 148A(b) - period of limitation - as notice issued u/s 148 is time-barred as issued beyond the window available i.e., between 01.04.2021 and 30.06.2021 as per the provisions of Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 - HELD THAT - The record shows that on two previous occasions, i.e., 10.10.2022 and 21.11.2022, opportunity was given to Mr Maratha to obtain instructions. Obviously, no instructions have been received by Mr Maratha. Issue notice. Respondents accepts notice on behalf of the respondents (which includes CBDT/respondent no.3). A counter-affidavit will be filed within three weeks from today.List the matter on 21.07.2023

Summary

Issues:
1. Challenge against notice under Section 148 of the Income Tax Act, 1961
2. Challenge against notice/letter under Section 148A(b) and order under Section 148A(d) of the Act
3. Challenge against Instruction No.1 dated 11.05.2022 issued by the Central Board of Direct Taxes (CBDT)
4. Examination of the vires of sections 147 and 148 of the Act invoking Article 14 of the Constitution
5. Time-barred issuance of notice under Section 148 of the Act

Analysis:

1. The writ petition challenges a notice dated 30.06.2021 under Section 148 of the Income Tax Act, 1961. Additionally, the petition contests a notice/letter dated 13.05.2022 under Section 148A(b) and an order dated 27.07.2022 under Section 148A(d) of the Act. Moreover, Instruction No.1 dated 11.05.2022 issued by the CBDT is also challenged, following the judgment in Union of India v. Ashish Aggarwal.

2. The petitioner argues that the notice issued under Section 148 of the Act is time-barred as it was dispatched on 16.07.2021, beyond the permissible window between 01.04.2021 and 30.06.2021 as per the provisions of the Taxation and Other Laws Act, 2020. The petitioner asserts that for the assessment year 2014-2015, the limitation expired on 31.03.2018, and the transaction in question was disclosed in the financial statements.

3. The petitioner contends that since the notice under Section 148 of the Act was served on 16.07.2021, the proceedings are time-barred. Despite opportunities given to the respondents' counsel to obtain instructions, no response was received. Consequently, notice is accepted on behalf of the respondents, including the CBDT.

4. A counter-affidavit is to be filed within three weeks, with a rejoinder, if any, before the next hearing date. The matter is listed for 21.07.2023, and in the interim, the impugned order dated 27.07.2022 and the reassessment proceedings for the assessment year 2014-2015 are stayed.