2022 (5) TMI 52 - HC - Income Tax

Reopening of assessment u/s 147 - petitioner s counsel submits that in view of the fact that the respondents have not taken into consideration the reasons given by the petitioner with respect to the alleged income, which was alleged to have escaped assessment, the procedure pending before the respondents under Section 148 of the IT Act should be set aside - Income Tax Department submits that the final decision with respect to the proceedings under Section 148 of the IT has not been made by the respondents till date and as such, the present case is a pre-mature - HELD THAT - On considering the fact that the proceedings under Section 148 of the IT Act, 1961, which had started with the issuance of the notice on 26.03.2021 and the petitioner has taken part in the proceedings, this Court is not inclined to entertain the present petition. Further, the respondents have not taken a final decision with regard to the above proceeding and as such, the present writ petition is found to be premature. WP dismissed.

Summary

Issues Involved:
1. Validity of re-opening a case under Section 147 of the Income Tax Act, 1961.

Analysis:
The petitioner challenged the procedure adopted by the respondents in re-opening their case under Section 147 of the Income Tax Act, 1961, arguing it was illegal and should be set aside. The petitioner received a notice under Section 148 of the IT Act, alleging that their income for the assessment year 2017-2018 had escaped assessment. The petitioner's counsel contended that there was no direct link between the reasons recorded by the respondents and the belief of the Assessing Officer regarding the alleged escaped income. The petitioner explained that the amount in question had actually been given as a loan to another entity and had been returned to the petitioner. Despite the petitioner's objections and request to drop the proceedings, the respondents rejected the plea, leading to the present legal challenge.

The Income Tax Department representative argued that a final decision on the Section 148 proceedings had not been reached yet, making the current petition premature. It was highlighted that even after a decision by the respondent, the petitioner would have avenues for appeal before higher authorities. The Court noted that the proceedings under Section 148 had commenced with the notice issued to the petitioner, who had participated in the process. As the final decision had not been made by the respondents, the Court declined to entertain the petition, deeming it premature. Consequently, the writ petition was dismissed, allowing for further legal recourse once a final decision was rendered by the tax authorities.