2023 (10) TMI 978 - HC - Income Tax

Reopening of assessment u/s 147 - refusal to grant the benefit u/s 11 and 12 - total receipts is to be treated as an income of the petitioner as per Section 164 since the petitioner is not registered under Section 12 AA - HELD THAT - Principal Chief Commissioner of Income Tax has proceeded to pass an order u/s 148A(d) rejecting the objection of the petitioner to the show cause notice u/s 148A(b) on the ground that information exists to suggest that the transaction needs to be verified. Hence the reply of the assessee has been considered but the same is not found to be satisfactory. The assessee has not offered his unaccounted unexplained income for taxation purpose in his return of income. It is precisely evident that the office of the respondent is possessed of certain information which strongly suggests that the income chargeable to tax has escaped assessment for AY 2017-18. Thus, in our opinion, the impugned order u/s 148A(d) and notice u/s 148 would not warrant any interference under Article 226 of the constitution of India as challenge to such order would be available to an assessee while challenging the order passed in reassessment proceedings consequent to the notice issued u/s 148 - WP dismissed.

Summary

Issues involved:
The challenge to the order dated 31.7.2023 under Section 148-A (d) of the Income Tax Act for the Assessment Year 2017-18 and the consequential Notice dated 31.7.2023 issued under Section 148 of the Income Tax Act for the same assessment year.

Details of the Judgment:

Issue 1: Registration under Section 12 AA of the Act
The petitioner, a Society providing medical relief, had its registration under Section 12 AA canceled but later restored. Despite this, a notice was issued under Section 148 A (b) of the Act, leading to a recommendation for reopening the case. The petitioner argued that the refusal to grant benefits under Section 11 and 12 was unwarranted due to the restoration of registration. The respondent contended that the assessing authority found grounds to issue the notice under Section 148. The court found that the information available suggested that income had escaped assessment, and the notice under Section 148 was valid.

Issue 2: Assessment and Reassessment Proceedings
The court emphasized that the detailed adjudication on the information available with the Assessing Officer at the stage of passing the order under Section 148A(d) was not required. The purpose was to provide a detailed procedure under Section 148 for issuance of notice, followed by determination by the assessing authority on whether income had escaped assessment. The court held that the ultimate determination was subject to appeal and that the merits of the information would be considered in the reassessment proceedings initiated through the notice under Section 148.

Conclusion:
The court found no merit in challenging the order under Section 148A(d) and the notice under Section 148. It cited a previous case to support the view that any grievance on merits should be raised before the Assessing Officer in the reassessment proceedings. Therefore, the writ petition was dismissed, with no order as to costs.