2022 (12) TMI 225 - HC - Income Tax

Reopening of assessment u/s 147 - Provision for cases where assessment is in pursuance of an order on appeal, etc. u/s 150 - AO proposed to assess/re-assess the loss/depreciation allowance - HELD THAT - The provisions of sub- section (1) shall not apply in any case where any such assessment, reassessment or recomputation as is referred to in that sub-section relates to an assessment year in respect of which an assessment, reassessment or recomputation could not have been made at the time the order which was the subject-matter of the appeal, reference or revision, as the case may be, was made by reason of any other provision limiting the time within which any action for assessment, reassessment or recomputation may be taken. From a perusal of sub-section (1) of Section 150 of the Act, we find that the said provision is basically to be employed along with Section 148 of the Act to give effect to orders passed in appeal, reference or revision. It is not intended to re-open an assessment. Already order of the Tribunal has been given effect to by the assessing officer for the assessment year 1995-96 by the consequential order dated 21.12.2005. That being the position, it was not open to the assessing officer to have once again issued a notice under Section 148 r.w.s. 150 of the Act to reopen the assessment for the assessment year 1995-96, that too, on a different issue unconnected with the order of the Tribunal. We further find that the impugned notice has been issued after almost a period of nine years from the date of passing of the assessment order - That being the position, we are of the view that the impugned notice dated 20.03.2007 issued by respondent No.1 is without jurisdiction. The same is hereby set aside and quashed. WP allowed.

Summary

Issues:
1. Validity of notice issued under Section 148 r/w Section 150(1) of the Income Tax Act, 1961 for the assessment year 1995-96.

Analysis:
The petitioner filed a petition under Article 226 seeking to quash the notice dated 20.03.2007 issued by the Income Tax Officer, Ward 9(2), Hyderabad under Section 148 r/w Section 150(1) of the Income Tax Act, 1961. The petitioner was previously assessed for the assessment year 1993-94, and after appeals, a consequential order was passed for the assessment year 1995-96 to include capital gains. However, the impugned notice was issued almost nine years after the assessment order dated 13.02.1998. The High Court found that the notice issued by the assessing officer was without jurisdiction as it sought to reopen the assessment on a different issue unconnected with the Tribunal's order. The Court referred to Section 150 of the Act, emphasizing that it is meant to give effect to orders passed in appeal, reference, or revision, not to reopen assessments. Therefore, the impugned notice was set aside and quashed.

The Court noted that the impugned notice was issued long after the assessment order dated 13.02.1998, which was almost a nine-year gap. This delay was a crucial factor in determining the lack of jurisdiction in issuing the notice. The Court highlighted that the assessing officer had already given effect to the Tribunal's order for the assessment year 1995-96 through a consequential order in 2005. As per Section 150 of the Act, the notice under Section 148 is intended to make assessments or reassessments in consequence of orders passed in appeal or revision. Since the assessing officer had already acted upon the Tribunal's order, issuing a fresh notice after such a long delay was deemed inappropriate and beyond jurisdiction.

The High Court's analysis focused on the legal provisions of Section 150 of the Income Tax Act, 1961, which govern the issuance of notices for assessments or reassessments. The Court emphasized that the purpose of Section 150 is to implement orders passed in appeal, reference, or revision, not to reopen assessments on unrelated issues. By setting aside the impugned notice, the Court reaffirmed the principle that jurisdictional limits must be respected, especially when significant delays are involved. The judgment underscored the importance of adherence to legal procedures and the scope of authority granted to assessing officers under the Act.