2021 (5) TMI 460 - HC - Income Tax

Reopening of assessment u/s 147 - assessee submitted that notice issued beyond the period of limitation of six years from the end of the relevant assessment year - HELD THAT - In view of these facts and circumstances, if at all the ground regarding the limitation exists, then the petitioner is at liberty to raise the same before the Authority Competent and certainly not before this Court. The notice under Section 148 of the Act, which is impugned in the present writ petition, reveals that the respondent has reason to believe that the income chargeable to tax for the assessment year 2011-2012 has escaped assessment within the meaning of Section 147 of the Act. Thus the procedures as contemplated in case of GKN Driveshafts (India) Ltd 2002 (11) TMI 7 - SUPREME COURT is to be followed for the purpose of further adjudication and this Court is of an opinion that the present writ petition is premature. Writ against a notice is not entertainable in a routine manner. Undoubtedly, a notice can be challenged if the authority issued such notice has no competence of jurisdiction or if the notice is issued beyond the period of limitation. In the present case, the respondent has filed certain documents to establish that the notice was issued within the period of limitation and an additional typed set of paper is also filed. Thus, the petitioner is at liberty to raise the point of limitation before the authority with relevant documents and evidences and the Authority Competent is well within his power to adjudicate the same and take decision on merits and in accordance with law. WP dismissed.

Summary

Issues:
Challenge to notice under Section 148 of the Income Tax Act, 1961 for the assessment year 2011-2012 based on limitation grounds.

Analysis:
The writ petition challenges a notice issued under Section 148 of the Income Tax Act, 1961, for the assessment year 2011-2012, contending that the notice is beyond the six-year limitation period from the end of the relevant assessment year, rendering it null and void. The petitioner argues that the respondent lacks jurisdiction to issue the notice due to the limitation period specified under Section 147 of the Act. The main contention revolves around the failure to furnish reasons for the reopening of assessment to the assessee, which is a crucial aspect for challenging the notice. The petitioner asserts that the notice is invalid due to non-compliance with the limitation period and lack of communication of reasons for reopening.

The respondent, represented by the Senior Standing Counsel, relies on the principles established in the case of GKN Driveshafts (India) Ltd vs. Income Tax Officer and Others, emphasizing the necessity for the assessee to file returns and objections regarding proceedings initiated under Section 147 of the Act. It is argued that the petitioner must adhere to the principles outlined in the GKN Driveshafts case before challenging the basis for reopening the assessment under Section 148. The respondent contends that the writ petition is premature and not maintainable, as the petitioner needs to follow the prescribed procedures before raising objections related to the reopening of assessment.

Regarding the limitation issue, the Senior Standing Counsel presents documentation to support the timely issuance of the notice under Section 148. The Income Tax Officer communicated with the Senior Postmaster to ensure the proper service of the notice, and subsequent correspondence and bills were provided to establish the validity of the notice within the limitation period. The respondent argues that if any limitation concerns exist, they should be addressed before the competent authority and not before the Court, indicating that the petitioner can raise the limitation point with relevant evidence for adjudication by the competent authority.

The Court opines that challenging a notice under Section 148 is not a routine matter and can only be entertained if the issuing authority lacks jurisdiction or if the notice exceeds the limitation period. In this case, the Court notes that the respondent has submitted sufficient documents to demonstrate the timely issuance of the notice and dismisses the writ petition. The petitioner is advised to raise any limitation issues before the competent authority with supporting documents for proper adjudication. The judgment concludes with the dismissal of the writ petition and the connected miscellaneous petition, without any order as to costs.