2020 (2) TMI 1100 - HC - Income Tax

Reopening of assessment u/s 147 - Assessment not been passed within the period of limitation - HELD THAT - Anchi Devi 2008 (3) TMI 39 - HIGH COURT PUNJAB AND HARYANA is related to a situation where the assessment order had not been passed within the period of limitation under Section 143 (2) of the Act and that order attained finality with the dismissal of Revenue s Appeal by the ITAT. Thereafter, a fresh notice was issued under Section 148 of the Act for reopening of assessment. It was in this background that the Punjab Haryana High Court held that the proceedings could not be reopened since the original assessment had not been completed within the period of limitation and was time barred. In the present case, the notice under Section 148 had been issued to make assessment and not to reopen the assessment. There is no question of reopening of the assessment since the same had been quashed by the Tribunal on a purely technical ground. Metro Auto Corporation 2006 (7) TMI 139 - BOMBAY HIGH COURT was a case where the notice under Section 143 (2) was not issued before the expiry of the period of limitation. In that situation, the issuance of the notice under Section 148 of the Act was held to be bad in law. In the present case, the assessment has been sought to be made under Section 148 within the period of limitation. The earlier assessment order was held to be non est, since the same was not issued in the name of merged entity. Revenue cannot be expected to be complacent and not act with diligence only because their appeal 2019 (9) TMI 1322 - DELHI HIGH COURT is pending consideration before this Court against the order of the ITAT whereby the assessment order has been quashed on a technical ground. Revenue is expected to ensure that they initiate a proceeding, so that, in the eventuality of the aforesaid appeal of the Revenue being dismissed by this Court, they are not faced with a situation that initiation of fresh action under Section 148 is barred by limitation. We are inclined to consider the plea of Mr. Vohra that in view of the pendency of aforesaid appeal, the proceedings initiated under Section 148 of the Act should not result in passing of any enforcement of the fresh assessment order since there cannot be parallel proceedings undertaken with respect to the same assessment year. In order to consider the plea, we issue notice.

Summary

Issues:
1. Validity of notice issued under Section 148 of the Act for the assessment year 2014-15.
2. Whether the assessment proceedings can continue in light of the pending appeal.

Analysis:
1. The High Court analyzed the validity of the notice issued under Section 148 of the Act for the assessment year 2014-15. The petitioner argued that the assessment proceedings were non-est as they were concluded in the name of a non-existent entity. However, the court found no fault in the issuance of the notice, stating that it was the responsibility of the respondents to prevent a situation where the pending appeal being rejected would lead to the notice being time-barred. The court differentiated this case from previous judgments where assessments were reopened due to time limitations, emphasizing that in this case, the notice was for making a new assessment, not reopening an old one.

2. Regarding the continuation of assessment proceedings amidst the pending appeal, the petitioner contended that no enforcement of a fresh assessment order should occur due to the parallel proceedings for the same assessment year. The court acknowledged the need for diligence on the part of the Revenue to avoid limitation issues but also considered the petitioner's plea. Consequently, the court issued a notice for further consideration, directing that while assessment proceedings may proceed, the assessment order should not be enforced until the matter is resolved. The case was listed for further hearing, allowing both parties to file necessary documents within specified timelines.