2024 (6) TMI 694 - HC - Income Tax

Validity of reassessment - second notice issued during pendency of first reassessment proceedings - questioning the jurisdiction and/or authority of the jurisdictional officer to issue the notice dated 26th April, 2023 u/s 148 of the Income Tax Act, 1961 as amended by Finance Act, 2021 - as argued no notice under Section 148 of the said Act can be issued in respect of the assessment year 2016-17, beginning on or before 1st April, 2021 in terms of the amended provisions of Section 149 of the said Act, since notice was issued for the assessment year 2016-17 and should follow the un-amended provisions of Section 149 HELD THAT - As considering the fact that no second notice under Section 148 of the said Act in respect of the assessment year 2016-17 could have been issued and further taking note of the amended provisions of Section 149 of the said Act, including the jurisdictional issue involved, it is of the view that the writ petition should be heard. Further since, the petitioner has been able to make out a prima facie case, all further proceeding in connection with the notice issued under Section 148 of the said Act, for the assessment year 2016-17 dated 26th April, 2023 shall remain stayed till the end of September, 2024 or until further orders, whichever is earlier. Let affidavit-in-opposition to the present writ petition be filed within a period of three weeks after the summer vacation. Reply thereto, if any, be filed within two weeks thereafter. List this matter in the Combined Monthly List of July, 2024.

Summary

Issues involved: Jurisdiction and authority of jurisdictional officer to issue notice u/s 148 of the Income Tax Act, 1961 as amended by Finance Act, 2021 for assessment year 2016-17.

Jurisdiction and Authority of Jurisdictional Officer:
The petitioner challenged the notice dated 26th April, 2023 u/s 148 of the Income Tax Act, 1961, questioning the jurisdiction of the jurisdictional officer. The petitioner's advocate argued that the notice was issued for the assessment year 2016-17 and should follow the un-amended provisions of Section 149 of the Act. It was contended that since reassessment proceedings had already been concluded for the same assessment year, the subsequent notice dated 26th April, 2023 was without jurisdiction. The petitioner relied on a judgment by the High Court of Delhi to support this argument.

Prima Facie Case and Stay of Proceedings:
Considering the jurisdictional issue and the fact that no second notice could have been issued for the assessment year 2016-17, the court decided to hear the writ petition. It was noted that the petitioner had made out a prima facie case, and therefore, all further proceedings related to the notice dated 26th April, 2023 were stayed until the end of September, 2024 or until further orders, whichever is earlier.

Directions for Further Proceedings:
The court allowed the respondents to file an affidavit-in-opposition within three weeks after the summer vacation, with a two-week period for the petitioner to file a reply. The matter was listed in the Combined Monthly List of July, 2024 for further proceedings.