2022 (5) TMI 1106 - HC - Income Tax

Reopening of assessment u/s 147 - Validity of Order under clause (d) of Section 148A - non consideration of petitioner s response to the initial notice - HELD THAT - As the impugned order under clause (d) of Section 148A of the Act was issued on April 1, 2022 without taking the petitioner s response to the initial notice into consideration. The same would be apparent from the penultimate paragraph of the impugned notice of April 1, 2022 which records that no reply was furnished by the assessee in response to the notice under Section 148A(b) of the Act. Since there appears to be an error apparent on the face of the impugned order passed under Section 148A(d) of the Act dated April 1, 2022 and the Department failed to consider the assessee s written response that was received by the Department on March 30, 2022, the impugned order of April 1, 2022 cannot be sustained and the same is set aside. As a consequence, the notice under Section 148 of the Act also dated April 1, 2022 is quashed with liberty to the Department to issue a fresh notice in accordance with law, if the Department is so entitled. It will now be open to the Department to consider the matter afresh by taking into account the petitioning assessee s response of March 30, 2022 before taking further steps in the matter in accordance with law.

Summary

Issues:
Challenge to order under Section 148A of the Income Tax Act, 1961.

Analysis:
The judgment concerns a challenge to an order dated April 1, 2022, passed under clause (d) of Section 148A of the Income Tax Act, 1961. Initially, a notice under clause (b) of Section 148A for the assessment year 2015-16 was issued to the petitioner on March 23, 2022, requiring them to show cause why a notice under Section 148 of the Act should not be issued. The petitioner responded to the show-cause notice, as evidenced by the e-proceedings response acknowledgment dated March 30, 2022. However, the impugned order under clause (d) of Section 148A was issued on April 1, 2022, without considering the petitioner's response to the initial notice, leading to an error apparent on the face of the order.

The Court found that the Department failed to consider the petitioner's written response received on March 30, 2022, before issuing the impugned order on April 1, 2022. Consequently, the Court set aside the impugned order and quashed the notice under Section 148 of the Act dated April 1, 2022. The Department was granted liberty to issue a fresh notice in accordance with the law if entitled to do so. The judgment allows the Department to reconsider the matter by taking into account the petitioner's response before proceeding further in accordance with the law, ensuring that the rights and obligations of both parties are not prejudiced.

In conclusion, the writ petition was disposed of without any order as to costs, providing a resolution to the challenge against the order under Section 148A of the Income Tax Act, 1961.