2022 (6) TMI 247 - HC - Income Tax

Reopening of assessment u/s 147 - notice u/s 148A against non-existent entity - As argued violation of principles of natural justice without taking into consideration the reply filed by the Petitioner - HELD THAT - Revenue on instructions of the Assessing Officer admits that the Petitioner s reply was not taken into consideration while passing the impugned order under Section 148A(d) Keeping in view the fact that the impugned order and notice have been issued without considering the reply filed by the Petitioner, this Court sets aside the impugned order passed under Section 148A(d) of the Act and the notice issued under Section 148 of the Act by the Respondent No.1both dated 4th April, 2022 for the Assessment Year 2018-19. The Assessing Officer is directed to pass a fresh reasoned order in accordance with law after considering the reply filed by the Petitioner within eight weeks.

Summary

Issues:
Challenging order under Section 148A(d) of the Income Tax Act, 1961 and notice under Section 148 for Assessment Year 2018-19.

Analysis:
The petitioner challenged the order dated 4th April, 2022, passed by Respondent No.1 under Section 148A(d) of the Income Tax Act, 1961, and the notice issued under Section 148 for the Assessment Year 2018-19. The petitioner argued that the reassessment proceedings were void ab initio as they were issued in the name of a non-existent entity, which had amalgamated with the petitioner company. Citing a Supreme Court decision, it was contended that issuing a notice to a non-existent company is a substantive illegality. Additionally, the petitioner claimed that there was no information regarding the escapement of income, which is necessary for taking action under Section 148 of the Act. The petitioner also alleged a violation of principles of natural justice as the reply filed by them was not considered before passing the impugned order.

The court noted that the respondent admitted that the petitioner's reply was not considered while passing the impugned order. Consequently, the court set aside the order under Section 148A(d) of the Act and the notice issued under Section 148 for the Assessment Year 2018-19. The Assessing Officer was directed to pass a fresh reasoned order after considering the petitioner's reply within eight weeks. The court clarified that it did not comment on the merits of the controversy and left the rights and contentions of all parties open.

In conclusion, the court disposed of the writ petition and applications with the direction for a fresh order to be passed by the Assessing Officer. The judgment emphasized the importance of considering the petitioner's reply and upholding principles of natural justice in such proceedings.