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2023 (12) TMI 218 - HC - Income TaxValidity of reassessment proceedings - Authentication of notices and other documents u/r 127A - Scope of new regime u/s 148A - two notices issued - as argued notice issued u/s 148 are unsustainable as they are neither signed and have been simply uploaded and transmitted to the petitioner for the first time on 15.04.2021 after Section 148A was inserted of the Income Tax Act, 1961 with effect from 01.04.2021 - new procedure under the new regime under Section 148A of the Income Tax Act, 1961 ought to have been followed - HELD THAT - There are two notices issued u/s 148 for the same Assessment Year 2013-2014. The first notice issued to the petitioner is dated 30.03.2021. It is not digitally signed. Same notice has been issued in time. It is beyond the limitation under Section 147 of the Income Tax Act, 1961 as it stood till 31.03.2021. The second notice issued to the petitioner is dated 07.04.2021. If notice issued on the later dated on 07.04.2021 is considered valid, the trajectory of the Assessment has to be completed in accordance with the new regime with effect from 01.04.2021 in terms of the decision of the Hon'ble Supreme Court in Union of India vs. Ashish Agarwal, 2022 (5) TMI 240 - SUPREME COURT On the other hand, if the notice was issued to the petitioner on 31.03.2021, the question of either challenging the notice dated 30.03.2021 issued u/s 148 or the consequential Assessment Order dated 30.03.2022 cannot be countenanced and therefore the Writ Petitions have to be dismissed. Therefore, the argument of petitioner that the notice issued on 30.03.2021 under Section 148 of the Income Tax Act, 1961 cannot be construed to be a notice in the eye of law because it was not signed cannot be countenanced in the light of Rule 127A of the Income Tax Rules, 1962. In the annexure to the notice issued under Section 142(1) to the petitioner on 16.08.2021, it is confirmed that the notice was served on the petitioner on 07.04.2021. Although the reference to the date of the notice has been given as 31.03.2021, it is evident it refers to 30.03.2021. It has to be therefore construed that the reference to the date 31.03.2021 in annexure to Section 142(1) notice dated 16.08.2021 refers to impugned notice dated 30.03.2021 issued under Section 148 of the Income Tax Act, 1961, as it stood prior to its substitution with effect from 01.04.2021. Considering the above, the proceedings should have been decided in accordance with paragraph Nos.7 to 10 of the decision of the Hon'ble Supreme Court in Union of India vs. Ashish Agarwal, case supra . Thus, the impugned notice dated 30.03.2021 ought to have been decided in accordance with the new provisions with effect from 01.04.2021 in terms of decision of Ashish Agarwal 2022 (5) TMI 240 - SUPREME COURT as it has been admittedly served on the petitioner only on 07.04.2021 in terms of annexure to Section 142(1) notice dated 16.08.2021. Consequently, the impugned Assessment Order dated 30.03.2022 pursuant to impugned notice dated 30.03.2021 is liable to be quashed for passing a fresh order under the new regime as expeditiously as possible, preferably within a period of six (6) months from the date of receipt of a copy of this order. Considering the fact that the dispute pertains to the Assessment Year 2013-2014, issuing of the second notice dated 07.04.2021 under Section 148 of the Income Tax Act, 1961 was unnecessary. Therefore, impugned noticed dated 07.04.2021 under Section 148 of the Income Tax Act, 1961 is quashed. Accordingly W.P. is allowed.
Issues Involved:
1. Validity of the notice dated 30.03.2021 issued under Section 148 of the Income Tax Act, 1961. 2. Validity of the notice dated 07.04.2021 issued under Section 148 of the Income Tax Act, 1961. 3. Validity of the consequential Assessment Order dated 30.03.2022. Summary: Issue 1: Validity of the notice dated 30.03.2021 issued under Section 148 of the Income Tax Act, 1961 The petitioner challenged the validity of the notice dated 30.03.2021, arguing it was not signed by a competent officer and was only electronically transmitted on 15.04.2021, after the insertion of Section 148A effective from 01.04.2021. The court noted that, under Rule 127A of the Income Tax Rules, 1962, electronic communication of notices is deemed authenticated if the name and office of the issuing authority are included. The court found that the notice dated 30.03.2021, though not digitally signed, was validly issued as per the rules and confirmed that it was served on the petitioner on 07.04.2021. Issue 2: Validity of the notice dated 07.04.2021 issued under Section 148 of the Income Tax Act, 1961 The petitioner argued that the notice dated 07.04.2021 was barred by law as per the Supreme Court's decision in Union of India vs. Ashish Agarwal. The court agreed, stating that the second notice was unnecessary and quashed it. Issue 3: Validity of the consequential Assessment Order dated 30.03.2022 The petitioner contended that the Assessment Order dated 30.03.2022, based on the notice dated 30.03.2021, should be quashed as it did not follow the new procedure under Section 148A. The court concurred, noting that the assessment should have been conducted under the new regime effective from 01.04.2021, as per the Supreme Court's decision in Union of India vs. Ashish Agarwal. Consequently, the court quashed the Assessment Order dated 30.03.2022 and remanded the case for a fresh order under the new regime. Conclusion: The court allowed W.P.No.14343 of 2022 by remanding the case for a fresh order under the new regime. W.P.No.14348 of 2022 was allowed by quashing the notice dated 07.04.2021. The connected Miscellaneous Petitions were closed with no costs.
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