2022 (5) TMI 1614 - HC - Income Tax

Validity of reopening of assessment - period of limitation - Date of issuance of notice - HELD THAT - As the impugned notice through email was sent to the petitioner on 01.04.2021. Thus, it has been admitted by the respondents that the impugned notice under Section 148 of the Income Tax Act, 1961 was issued to the petitioner on 01.04.2021 i.e. after expiry of limitation on 31.03.2021. Respondents admits that the controversy involved in the present writ petition is covered by the judgment of Daujee Abhushan Bhandar Pvt. Ltd. Vs. Union Of India And 2 Others ( 2022 (3) TMI 784 - ALLAHABAD HIGH COURT and, therefore, this writ petition may also be disposed of in terms of the said judgment. The impugned notice u/s 148 and the reassessment order passed are hereby quashed.

Summary

Issues:
1. Validity of the notice dated 31.03.2021 issued under Section 148 of the Income Tax Act, 1961 for Assessment year 2016-17.
2. Validity of the assessment order and demand notice under Section 147 read with Section 144B of the Income Tax Act 1961.
3. Validity of the notifications dated 31.03.2021 and 27.04.2021 issued by Respondent no.3.
4. Legality of the proceedings against the Petitioner for Assessment year 2016-17 under the Income Tax Act.

Analysis:

1. The petitioner filed a writ petition seeking to quash the notice dated 31.03.2021 under Section 148 of the Income Tax Act, 1961, for Assessment year 2016-17. The petitioner argued that the notice was issued on 1.4.2021, after the limitation period expired on 31.3.2021. Citing a previous judgment, the petitioner contended that the notice and reassessment order were without jurisdiction and should be quashed. The respondent was granted time to respond or file a counter affidavit.

2. In compliance with the court's order, the respondent produced instructions admitting that the impugned notice was sent to the petitioner via email on 01.04.2021, after the limitation period had ended on 31.03.2021. The respondent acknowledged that the controversy was covered by a previous judgment and agreed to dispose of the present writ petition accordingly. Consequently, the court disposed of the writ petition in line with the earlier judgment, quashing the notice dated 31.03.2021 and the reassessment order dated 12.03.2022.

3. The court's decision was based on the acknowledgment by the respondents that the notice was issued after the expiry of the limitation period, rendering it invalid. The court relied on the precedent set in a previous case to determine the outcome of the present writ petition. As a result, the impugned notice under Section 148 of the Income Tax Act, 1961, and the reassessment order were both declared void and quashed by the court.

4. The judgment emphasized the importance of adhering to statutory timelines and limitations when issuing notices and conducting assessments under the Income Tax Act. By upholding the principle of legality and jurisdiction, the court ensured that actions taken by the tax authorities were in accordance with the law. The decision served as a reminder of the significance of procedural compliance in tax matters and the consequences of failing to meet statutory requirements.