2024 (5) TMI 504 - HC - Income Tax

Reopening of assessment - two simultaneous assessments proceedings initiated against the same transaction amount - penalty notice u/s 271 AAC issued on an uncertain Assessment Order - as submitted by petitioner that in case of search of premises/offices of Omaxe Group some papers have been discovered by the authorities then Section 153A and 153C would apply and not Section 147 and 148 - HELD THAT - This Court is of the opinion that the impugned notice for AY 2019-20 u/s 148(A) (d) and the Final Order passed u/s 148(A) (d) on 27.03.2023 for AY 2019-20 can both be looked into in appeal that is pending before the Commissioner of Income Tax. The protective Assessment Order that has been issued u/s 147 read with Section 144 B has also been challenged in an appeal before the CIT. A show cause notice issued for imposing penalty for AY 2019-20 which has been challenged could not have been issued unless the Assessment Order for the AY 2019-20 had been finalised in appeal. We have come to this conclusion on the basis of observations made in Bhailal 2014 (10) TMI 621 - GUJARAT HIGH COURT The show cause notice does indeed say that in case the petitioner has filed an appeal or has filed objections copy of such appeal/objections be submitted along with the answers by the Assessee but the time limit for such submission has already expired. The petitioner has not submitted any reply to the show cause notice for imposing penalty as the petitioner had challenged the jurisdiction of the Assessing Officer in issuance of such show cause notice only on the basis of a protective Assessment Order. We have not been shown any document to say that even after time limit i.e. 25.04.2024 has expired any final penalty has been imposed u/s 271AAC therefore this Court is of the opinion that no such final orders imposing penalty should be passed till the appeal of the petitioner is decided by the CIT - Petitioner is at liberty to approach the AO and file a detailed reply along with documents to the notice issued u/s 271 AAC (1).

Summary

Issues involved:
The judgment involves issues related to income tax assessments, re-assessments, show cause notices, and penalty imposition u/s 271 AAC of the Income Tax Act, 1961.

Main Prayers of the Petitioner:
The petitioner sought writ orders to quash various notices and orders related to income tax assessments for the assessment year 2019-20 passed u/s 148A clause (b) and (d) of the Income Tax Act, 1961. Additionally, the petitioner challenged the assessment proceedings initiated against the same transaction amount and questioned the amount of transaction for the same cause of action.

Facts of the Case:
The petitioner's husband, a retired government employee, invested an amount in Omaxe Infrastructure Scheme through banking channels. Upon his death, the amount was transferred to the petitioner's account and reinvested in Omaxe Avenue Scheme. The Income Tax Department conducted a search in Omaxe Group premises, alleging unaccounted cash transactions of Rs. 4,10,00,000/- involving the petitioner.

Challenges by the Petitioner:
The petitioner challenged the simultaneous re-assessment notices for two different assessment years for the same amount, arguing jurisdictional errors in the notices issued u/s 147 and 148. The petitioner also contested the penalty notice issued under Section 271 AAC without a final or substantive assessment order.

Legal Arguments:
The petitioner relied on precedents to support the contention that protective assessment orders do not warrant penalty imposition until finalization of assessments. The petitioner argued that the notices issued under Section 147 were incorrect, and the penalty notice was premature without a final assessment order.

Court's Decision:
The Court opined that the challenged notices and orders could be addressed in the pending appeal before the Commissioner of Income Tax. The Court referred to a Division Bench judgment to support its conclusion that final penalty orders should not be passed until the appeal is decided. The petitioner was advised to submit a detailed reply to the penalty notice and approach the Assessing Officer accordingly.

Conclusion:
The writ petition was disposed of with the above observations, allowing the petitioner to address the penalty notice after the appeal decision by the Commissioner of Income Tax.