2023 (7) TMI 688 - HC - Income Tax

Reopening of assessment u/s 147 - validity of order passed u/s 148A(d) - Period of limitation - HELD THAT - We are in agreement with revenue that the notice dated 23.05.2022 issued u/s 148A(b) of the Act cannot be declared as being untenable in law, since even according to assessee 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 2022 (5) TMI 240 - SUPREME COURT which according to assessee would not apply qua the AY in issue, it would not render the notice untenable, as it is common case of counsel for parties that after 01.04.2021, notices could have been issued only under the new regime. Assessee cannot but accept that the notice dated 23.05.2022 has been issued under the new regime, i.e., u/s 148A(b) of the Act. Since proceedings on the very same aspects have been dropped in for the past AYs, that aspect required attention of the assessing officer - We are conscious of the fact that the rule of res-judicata does not apply, i.e., that each AY is different. That being said, if the reasons for reopening are consistently similar or same, the AO needs to apply the principle of consistency, before passing the assessment order. See Radhasaomi Satsang 1991 (11) TMI 2 - SUPREME COURT Revenue on instructions, states that personal hearing has already been granted to the authorised representative of the petitioner. 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. WP is disposed of, in the aforesaid terms.

Summary

Issues involved:
The judgment deals with a writ petition challenging an order passed under Section 148A(d) of the Income Tax Act, 1961, along with consequential notices issued under Section 148 of the Act and a notice under Section 148A(b) of the Act. The issues raised include the sustainability of the notices and the consideration of past assessment records in the current proceedings.

Sustainability of Notice under Section 148A(b) of the Act:
The petitioner contended that the notice dated 23.05.2022 issued under Section 148A(b) of the Act was unsustainable in law due to a reference to a Supreme Court decision. The petitioner argued that the limitation for the Assessment Year 2019-20 had not expired at the relevant time. However, the respondent argued that since the limitation had not expired, the notice was sustainable under the Act. The court agreed with the respondent that the notice could not be declared untenable, as the limitation for the relevant year would expire later. The notice was issued under the new regime of Section 148A(b) of the Act, which was found to be valid.

Consideration of Past Assessment Records:
The petitioner raised concerns regarding the genesis of the reassessment triggered against them, which stemmed from a survey conducted on the petitioner and others. The petitioner argued that the reasons for initiating proceedings were similar to those for past assessment years. The petitioner pointed out that the issues in the current assessment were also addressed in the assessments for the preceding years. The court acknowledged the importance of considering past assessment records before passing the assessment order. It was noted that even though each assessment year is different, if the reasons for reopening are consistent or the same, the principle of consistency should be applied by the Assessing Officer.

Conclusion:
The court disposed of the writ petition with directions for the Assessing Officer to pass a speaking assessment order taking into account the issues raised regarding the completion of assessments for prior years involving similar aspects. The parties were instructed to act based on the digitally signed copy of the order, thereby concluding the matter.