2021 (12) TMI 718 - HC - Income Tax

Reopening of assessment post Application u/s 245D(4) accepted - Counsel submitted that the order passed under sub-section (4) of Section 245D of the Income Tax Act is a conclusive order and the same cannot be reopened in any of the proceedings - HELD THAT - Issue notice of the writ petitions as well as stay applications, returnable on 24.01.2022. In the meanwhile, the respondents are restrained to proceed further in furtherance of the notices issued to the petitioners under Section 148 of the Income Tax Act and notice under sub section (1) of Section 142 of the Income Tax Act.

Summary

Issues:
1. Validity of reopening assessment under Section 148 of the Income Tax Act for the assessment year 2014-15 after a final order passed under Section 245D(4) for the years 2007-08 to 2014-15.

Analysis:
The petitioners had initially filed an application under Section 245D(4) of the Income Tax Act for the assessment years 2007-08 to 2014-15, and the final order was issued on 29th September, 2016. The authorities computed the income and additional income of the petitioners during this process. The counsel argued that the order passed under Section 245D(4) is conclusive and cannot be reopened in any subsequent proceedings under the Income Tax Act or any other law. However, the authorities issued a notice under Section 148 of the Income Tax Act to reassess the income/loss of the petitioners specifically for the assessment year 2014-15, which the petitioners contested by submitting a reply citing legal precedents, including a decision by the Gujarat High Court.

The petitioners contended that the reopening of assessment under Section 245D(4) is impermissible in law, and despite their response to the notice under Section 148, a further notice under sub-section (1) of Section 142 of the Income Tax Act was issued on 24th November, 2021. In response to these developments, the court issued notices for the writ petitions and stay applications, returnable on 24.01.2022. Additionally, the respondents were restrained from proceeding further based on the notices issued under Section 148 and sub-section (1) of Section 142 of the Income Tax Act until the next hearing scheduled for 24.01.2022. The court also directed the matters to be listed together on the given date and ordered a copy of the order to be placed in the connected file for reference.