2020 (3) TMI 437 - HC - Income Tax

Validity of reassessment order u/s 147 - order was not uploaded online - Validity of notice issued u/s 148 - seeking reason - though the petitioner has filed a return no reasons were sought. The assessing authority proceeded to issue a notice under Section 143(2) as well as questionnaires calling for information from the assessee. The assessee has also duly complied with the requests. It is for the first time on 02.11.2019 that the petitioner has sought reasons. - HELD THAT - Procedure followed by the revenue in time barring assessments is that while the order may not be uploaded immediately, a DIN number is generated and the order of assessment sent manually. In the present case, the DIN number appears to have been issued on 28.12.2019 and the assessment order in hard copy issued on the same date franked by the post office on 30.12.2019 and served upon the assessee on 02.01.2020, (though returned) with the endorsement 'left'. The assessment order, in original, is handed over to the learned counsel for the petitioner. Since the order has been received only now, the petitioner is given thirty (30) days from today to file a statutory appeal, if it is so desires. Recovery proceedings shall also commence after 30 days from today. The petitioner is directed to supply forthwith its present address for communication to the Department. As regards assessment year 2012-13, the petitioner has not sought reasons at all. It has however received the order of assessment and is permitted to file an appeal challenging all aspects of the impugned order, within a period of thirty (30) days from today.

Summary

Issues:
1. Challenge to notice under Section 148 for assessment year 2012-13 and penalty notices for AY 2013-14.
2. Procedure for re-assessment as per Supreme Court's guidelines.
3. Failure to provide reasons for re-opening assessment.
4. Instructions by Directorate of Income Tax regarding time barring assessment orders.
5. Issuance and service of assessment order in hard copy.

Analysis:

1. The petitioner challenged a notice under Section 148 for AY 2012-13 and penalty notices for AY 2013-14. The petitioner sought reasons for re-assessment, as per the procedure outlined by the Supreme Court in GKN Driveshafts case. The petitioner filed returns, but reasons were not provided by the assessing authority, leading to communication lapses and eventual assessment orders without uploading on the online portal.

2. The Supreme Court's guidelines emphasize that upon receiving a notice under Section 148, the taxpayer should file a return and request reasons for the re-opening. In this case, the petitioner failed to receive reasons despite filing a return, leading to the assessing authority proceeding with assessment without providing the necessary information, as highlighted in the GKN Driveshafts case.

3. The Directorate of Income Tax issued instructions regarding time barring assessment orders, emphasizing the manual upload process for such cases. The procedure involves passing the order manually, generating a DIN, uploading the order, and sending it to the CPC for accounting. Any discrepancies in data or computation are to be rectified promptly to avoid delays in the assessment process.

4. The assessment order in hard copy was issued to the petitioner, with a DIN number generated on 28.12.2019 and the order served on 02.01.2020. The petitioner was granted thirty days to file a statutory appeal and provide their current address for communication. Recovery proceedings were set to commence after the specified period, ensuring procedural compliance and legal recourse for the petitioner.

5. For AY 2012-13, the petitioner did not seek reasons but received the assessment order. They were allowed to file an appeal within thirty days. The writ petitions were disposed of without costs, concluding the legal proceedings related to the challenges against the notices and penalty orders for the respective assessment years.