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2023 (6) TMI 1343 - HC - Income TaxReopening of assessment u/s 147 - period of limitation - issuance of notice and initiation of reassessment proceedings are beyond the period of six years - Ld. State vehemently opposed the interim order as prayed for by the petitioner on the ground that the limitation is not applicable in the case of the petitioner and the assessment of tax is the fraudulent reversal of the Stock Exchange - HELD THAT - Considered the rival submissions of the respective parties, this Court finds that the matter is required to be heard on merit only after exchange of affidavits and, as such, this Court, prima facie, is of the view that if, at this stage, no stay is granted, the petitioner will be prejudiced. Accordingly, the respondents are directed to file affidavit-in-opposition within eight weeks from date; reply thereto, if any, within three weeks thereafter. In the meantime, there will be no further proceedings on the basis of the impugned order being annexure P-4 of the writ petition till disposal of the writ application. Let the matter appear before the next available Circuit Bench after completion of the period of 11 weeks.
Issues: Challenge to notice under Section 148 of Income Tax Act, 1961 for assessment year 2015-16 on grounds of jurisdiction and limitation.
Jurisdiction Issue: The petitioner challenged the notice dated 28th July, 2022 under Section 148 of the Income Tax Act, 1961, arguing that the assessing officer's jurisdiction was barred by limitation under Section 149(1)(a)/(b) of the Act. The assessing officer attempted to justify the proceeding based on an instruction issued by CBDT, but the initiation of reassessment proceedings was deemed to be beyond the six-year period and prima facie barred by limitation under both old and new amendment provisions of Section 149 of the Act. Stay Order: The Court, after considering the arguments of both parties, found that the matter required a detailed hearing on merit after the exchange of affidavits. It was observed that denying a stay at this stage could prejudice the petitioner. Therefore, the respondents were directed to file an affidavit-in-opposition within eight weeks, with a reply due within three weeks thereafter. Until the writ application is disposed of, no further proceedings were to take place based on the impugned order dated 28th July, 2022. Timeline and Proceedings: The Court scheduled the matter to appear before the next available Circuit Bench after 11 weeks. This timeline was set after considering the need for a comprehensive hearing on the jurisdiction and limitation issues raised by the petitioner regarding the notice under Section 148 of the Income Tax Act, 1961 for the assessment year 2015-16.
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