2023 (1) TMI 1330 - HC - Income Tax

Validity of order passed u/s 148A - re-assessment proceeding as beyond six years - jurisdiction of AO in issuance of the impugned notice u/s 148 of the Act being barred by limitation u/s 149(1)(a)/149(1)(b) - HELD THAT - In the impugned order u/s 148A(d) of the Act, the assessing officer has tried to justify the initiation of re-assessment proceeding by relying on an instruction being No. 01/2022 dated 11th May, 2022 issued by CBDT. Admittedly, the issuance of notice and initiation of re-assessment proceeding are beyond six years and, prima facie, it is barred by limitation both under the old Act as well as under newly amended provision relating to Section 147 of the Act. Considering the submission of the parties, it is of the view that this matter deserves adjudication by calling for affidavits from the respondents and the petitioner has been able to make out a prima facie case for an interim order by raising the issue of jurisdiction of the assessing officer concerned in initiating the impugned re-assessment proceeding. Let the respondents file affidavit-in-opposition within four weeks; petitioner to file reply thereto, if any, within two weeks thereafter. The matter shall appear for final hearing in the monthly list of April, 2023. In the meantime, there will be no further proceeding.

Summary

Issues: Jurisdiction of assessing officer in re-assessment proceeding under Section 148 of the Income Tax Act, 1961

In this judgment by the High Court of Calcutta, the petitioner challenged an order dated 29th July, 2022, under Section 148A(d) of the Income Tax Act, 1961, related to the assessment year 2015-16, along with subsequent proceedings based on the impugned notice issued under Section 148 of the Act. The main ground of challenge was the jurisdiction of the assessing officer in issuing the notice, which was argued to be barred by limitation under Section 149(1)(a)/149(1)(b) of the Income Tax Act, 1961. The assessing officer relied on an instruction from CBDT to justify the re-assessment proceeding, which was beyond the six-year limitation period, prima facie violating both the old and newly amended provisions of Section 147 of the Act.

The Court found that the matter warranted further adjudication and ordered the respondents to file an affidavit-in-opposition within four weeks, with the petitioner given two weeks to respond thereafter. The case was scheduled for final hearing in the monthly list of April 2023. Additionally, the Court directed that no further proceedings should take place based on the impugned order until the writ petition was disposed of, thereby granting an interim order in favor of the petitioner to halt any actions stemming from the challenged notice.