2023 (8) TMI 592 - HC - Income Tax

Validity of reopening of assessment u/s 147 - mandation to issue notice u/s 148 - notice issued with serious defects Notice directed to an entity in wrong name, wrong PAN, Wrong AY and wrong DIN - HELD THAT - A plain reading of the extract Section 148 would show that the AO, before making the assessment, reassessment or re-computation u/s 147 of the Act, is required to serve on the assessee a notice, along with a copy of the order passed, if required, under clause (d) of Section 148A of the Act. As per the provision, the AO is required to call upon the assessee within a defined period, to furnish a return of his income or income of any other person, in respect of which he is assessable, under this Act during the relevant AY. The return filed is, in law, considered as if it was furnished u/s139 of the Act. The reassessment proceedings can only commence once notice under Section 148 of the Act is issued. It is, clearly, a step which the AO is required to take before he assumes jurisdiction; inter alia, for reassessing the case. Non issue of notice for reopening is not a curable defect u/s 292B. Undoubtedly, there is a misstep on the part of the AO since the AO has not assumed jurisdiction as per law. Therefore, we have no hesitation in quashing the impugned notice issued under Section 148 of the Act. Decided in favour of assessee.

Summary

Issues involved:
The issues involved in the judgment are related to the jurisdictional errors in the notice issued under Section 148 of the Income Tax Act, 1961, specifically concerning the incorrect entity name, PAN details, assessment year, and Document Identification Number.

Details of the Judgment:

Jurisdictional Errors in the Notice:
The petitioner challenged the assessment order, demand notice, and penalty notice due to jurisdictional errors in the notice issued under Section 148 of the Act. The notice was directed to a different entity, Apollo Pipes Limited, instead of AVS Infrabuild Private Limited, the petitioner. The PAN, assessment year, and Document Identification Number in the notice were also incorrect. The petitioner highlighted these errors, emphasizing that they go to the root of the jurisdiction of the Assessing Officer.

Contentions of the Parties:
The respondents sought to defend the notice by referring to an intimation letter addressed to the petitioner, claiming that the petitioner had knowledge of the notice issued under Section 148. They argued that Section 292B could cure the defects in the notice due to human error. In contrast, the petitioner contended that jurisdictional defects in the notice cannot be rectified under Section 292B and are fundamental to the Assessing Officer's jurisdiction.

Court's Decision:
The court noted serious defects in the notice, which were not contested by the respondents. As these errors were substantial and not curable under Section 292B, the court quashed the impugned notice dated 29.07.2022. Consequently, the order, assessment, demand notices, and penalty notices associated with the erroneous notice were also set aside. The court emphasized that the reassessment proceedings can only commence upon the proper issuance of a notice under Section 148, which was lacking in this case.

Conclusion:
The writ petition was disposed of in favor of the petitioner due to the jurisdictional errors in the notice under Section 148 of the Act. The court's decision highlighted the importance of a valid notice for initiating reassessment proceedings and declared the impugned notices and orders as null and void.

Note: The judgment was delivered by Hon'ble Mr. Justice Rajiv Shakdher and Hon'ble Mr. Justice Girish Kathpalia of the Delhi High Court.