2023 (6) TMI 1134 - HC - Income Tax

Reopening of assessment - validity of order u/s 148A(d) - as argued since limitation had not expired at the relevant point in time, the notice issued u/s 148A(b) is sustainable, notwithstanding reference, as contended by to the judgment of the Supreme Court in Ashish Aggarwal s case 2022 (5) TMI 240 - SUPREME COURT HELD THAT - As notice issued u/s 148A(b) cannot be declared as being untenable in law, since even according to Mr. Jain, the limitation qua AY 2019-20 would have expired only on 31.03.2023. Merely because there is a reference to the judgment of Supreme Court in Ashish Aggarwal s case, which according to Mr Jain would not apply qua the AY in issue, would have render the notice untenable, as it is common case of counsel for parties that after 01.04.2021, notices could have issued only under the new regime. Petitioner cannot but accept that the notice dated 23.05.2022 has been issued under the new regime, i.e., under Section 148A(b) of the Act. However Petitioner argument carry weight insofar as the second aspect is concerned, i.e., that since proceedings on the very same aspects have been dropped in other AYs, that aspect required attention of the AO. Since according to Petitioner assessment order has not been passed, the assessing officer will advert to the record of the earlier assessment years before passing the assessment order. As rule of res-judicata does not apply, i.e., that each assessment year is different. That being said, if the reasons for reopening are consistently similar or same, the assessing officer needs to apply the principle of consistency before passing the assessment order. See Radhasaomi Satsang v CIT ( 1991 (11) TMI 2 - SUPREME COURT ) AO will issue a notice to the petitioner which would indicate the date and time of the hearing. AO will pass a speaking assessment order wherein the aforementioned aspect would be dealt with, i.e., that assertion that assessments have been completed for the AYs 2018-19 and 2020-21, involving aspects which are subject matter of the AY in issue.

Summary

Issues involved:
The judgment involves challenging an order passed under Section 148A(d) of the Income Tax Act, 1961, along with notices issued under Section 148 of the Act and Section 148A(b) of the Act. The petitioner contests the sustainability of the notices and the reasons for reassessment triggered against them.

Challenge to Notice dated 23.05.2022 under Section 148A(b) of the Act:
The petitioner argued that the notice is unsustainable due to the reference to a Supreme Court decision and the expiration of limitation for the Assessment Year (AY) in question. The respondent contended that the notice is valid as the limitation had not expired by the relevant time. The court agreed that the notice cannot be declared untenable in law as it was issued under the new regime, under Section 148A(b) of the Act.

Reassessment Triggered by Survey Conducted on 22.12.2020:
The petitioner raised concerns regarding the reasons for reassessment proceedings initiated for AYs 2013-14 to 2017-18, which were similar to those for AY 2019-20. The petitioner argued that these aspects were not considered by the Assessing Officer (AO) while passing the order dated 30.07.2022. The court acknowledged the petitioner's argument that the AO should consider the record of earlier assessment years before passing the assessment order.

Principle of Consistency in Assessment:
The court emphasized the importance of consistency in assessing similar or same aspects across different assessment years. While noting that each assessment year is distinct, the court directed the AO to apply the principle of consistency before passing the assessment order. The AO was instructed to accord a personal hearing to the petitioner's authorized representative and issue a speaking assessment order addressing the concerns raised regarding completed assessments for other AYs involving similar aspects.

Disposition of the Writ Petition:
The writ petition was disposed of with the direction for the AO to conduct a thorough assessment considering the petitioner's submissions and ensuring a fair process. The parties were instructed to act based on the digitally signed copy of the order, and the pending application was closed accordingly.