2022 (11) TMI 1412 - HC - Income Tax

Validity of reopening of assessment - determine the date of issuance of the notice issued u/s 148 - Assessment order relies upon a Suspicious Transaction Report ( STR ) regarding a credit - HELD THAT - There is no dispute that the assessment order dated 26th March, 2022, was passed in contravention of the interim order dated 24th March, 2022. Further, the said order has been passed without providing any opportunity to the petitioner to respond to the alleged information against it, in accordance with the judgment of GKN Driveshafts ( 2002 (11) TMI 7 - SUPREME COURT - Therefore, the said assessment order is null and void and is hereby set aside. AO is directed to provide a copy of the STR relied upon in its order within two (02) weeks. The Assessee shall furnish its reply and explanation to the transactions reported in the STR within a period of two (02) weeks thereafter. The AO shall also adjudicate on the plea of the Assessee that the tracking report available on the official website of the postal department records the date of issuance as 02nd April, 2022, while determining the date of issuance of notice. The AO shall after determining the date of issuance of notice proceed with the matter in accordance with the directions issued by this Court and in accordance with law.

Issues Involved:
1. Validity of the assessment order dated 26th March 2022.
2. Determination of the date of issuance of the notice under Section 148 of the Income Tax Act, 1961.
3. Discrepancies in Document Identification Numbers (DIN) of notices issued under Section 148.
4. Compliance with procedural requirements for issuing notices under Section 148.

Issue-wise Detailed Analysis:

1. Validity of the Assessment Order Dated 26th March 2022:
The assessment order dated 26th March 2022 was passed by the Assessing Officer (AO) despite an interim stay order dated 24th March 2022. The court found that the assessment order was passed without providing the petitioner an opportunity to respond to the allegations, violating the judgment in GKN Driveshafts (India) Ltd. v. ITO. Consequently, the assessment order dated 26th March 2022 was declared null and void and set aside.

2. Determination of the Date of Issuance of the Notice Under Section 148:
The AO claimed the notice under Section 148 was issued on 31st March 2021, supported by a speed post booking receipt. However, the petitioner contested this, stating the tracking report indicated the notice was received on 2nd April 2021. The court directed the AO to verify the records produced by both parties and determine the date of issuance based on the law laid down in RK Upadhyay v. Shanabhai P. Patel. If the notice was handed over to the postal office on 31st March 2021, the reassessment proceedings should follow the old regime of Section 148. If the notice was handed over on or after 1st April 2021, it would be treated under Section 148A(b), following the Supreme Court's directions in Union of India v. Ashish Aggarwal.

3. Discrepancies in Document Identification Numbers (DIN) of Notices Issued Under Section 148:
The petitioner highlighted discrepancies in the DINs of the notices issued under Section 148, with distinct DINs for notices sent via speed post and those available on the ITBA Portal. The Department explained that technical issues during the bulk generation process caused the discrepancies. The court accepted the Department's explanation that both notices were genuine despite having distinct DINs, as their contents were identical.

4. Compliance with Procedural Requirements for Issuing Notices Under Section 148:
The petitioner argued that the notices were issued without adhering to the limitation period prescribed under Section 149 of the Act, as amended by the Finance Act, 2021. Additionally, the unsigned notice uploaded on the ITBA portal violated Section 282A(1) of the Act, which mandates that notices must be signed. The Department countered that the AO manually signed the notice due to technical issues and sent it via speed post on 31st March 2021. The court directed the AO to provide a copy of the Suspicious Transaction Report (STR) relied upon in the order dated 26th March 2022 and allowed the petitioner to respond within two weeks.

Conclusion:
The court modified the judgment dated 27th September 2022, directing the AO to verify the date of issuance of the notice and proceed accordingly. The assessment order dated 26th March 2022 was set aside, and the AO was instructed to provide the STR to the petitioner. The discrepancies in DINs were explained and accepted, and compliance with procedural requirements was emphasized. The petition and pending applications were disposed of with these directions.

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