2024 (7) TMI 1439 - HC - Income Tax

Reopening of assessment u/s 147 - order u/s 148 (A) (d) of the Act was passed by respondent no. 3, without obtaining prior approval of the specified authority, i.e. Principal Chief Commissioner of Income Tax, and ex post facto approval was obtained after passing the order under clause (d) of Section 148(A) - HELD THAT -From perusal of record, it is revealed that Principal Chief Commissioner of Income Tax had granted approval on 19.04.2024 and the order under clause (d) of Section 148(A) was passed by respondent no. 3, the same day. Thus, the Statutory requirement of prior approval is also met, and the order passed by respondent no. 3 cannot be faulted on this count. Since this Court does not find any illegality or infirmity in the notice issued to the petitioner u/s 148 (A) (b) and the order passed u/s 148 (A) (d), therefore, any interference in the matter would be unwarranted. WP Dismissed.

Issues Involved:
1. Validity of assessment proceedings under Section 148A of the Income Tax Act for the Assessment Year 2017-18.
2. Adherence to procedural requirements under Section 148A by the Assessing Officer.
3. Adequacy of time and opportunity provided to the petitioner to respond to notices.
4. Requirement of personal hearing.
5. Sharing of information and investigation report with the petitioner.
6. Interpretation of the term "suggests" in Section 148 post-amendment by the Finance Act, 2021.
7. Prior approval of the specified authority before passing the order under Section 148A(d).
8. Prematurity of the writ petition and availability of alternate remedies under the Income Tax Act.

Detailed Analysis:

1. Validity of Assessment Proceedings:
The petitioner sought to quash the assessment proceedings for Assessment Year 2017-18, challenging the notices issued under Section 148A(b) and the order under Section 148A(d) as unconstitutional, without jurisdiction, void ab-initio, and against the principles of natural justice.

2. Adherence to Procedural Requirements:
The petitioner contended that the Assessing Officer did not follow the prescribed procedure under Section 148A(a) and (b), particularly regarding the non-conduct of an enquiry and lack of approval from the specified authority. The court clarified that the enquiry under Section 148A(a) is discretionary, not mandatory, and that the approval of the specified authority is only necessary if an enquiry is conducted.

3. Adequacy of Time and Opportunity:
The petitioner argued that insufficient time was provided to respond to the notices, with only seven days given instead of the 30 days contemplated under Section 148A(b). The court found this argument without merit, noting that the petitioner was given multiple opportunities to respond, extending the time to more than three weeks.

4. Requirement of Personal Hearing:
The petitioner claimed that no personal hearing was provided. The court noted that the petitioner did not request a personal hearing, and hence, there was no violation of the provision.

5. Sharing of Information and Investigation Report:
The petitioner alleged that the information and investigation report were not shared. The court found that both the information and the investigation report were indeed shared with the petitioner, as evidenced by the notices dated 21.03.2024 and 03.04.2024.

6. Interpretation of "Suggests" in Section 148:
The petitioner argued that the term "suggests" in Section 148 should be interpreted similarly to "reason to believe," requiring definite information for reassessment. The court disagreed, emphasizing that "suggests" indicates a prima facie opinion based on material, not a conclusive determination. This interpretation aligns with the legislative intent to ease the initiation of reassessment proceedings.

7. Prior Approval of Specified Authority:
The petitioner claimed that the order under Section 148A(d) was passed without prior approval from the Principal Chief Commissioner of Income Tax. The court found that the approval was granted on the same day the order was passed, thus meeting the statutory requirement.

8. Prematurity of the Writ Petition and Alternate Remedies:
The revenue argued that the writ petition was premature and that the petitioner should have exhausted alternate remedies under the Income Tax Act. The court agreed, referencing the Supreme Court's judgments in CIT v. Chhabil Dass Agarwal and Anshul Jain v. Pr. CIT, which emphasize the importance of following the statutory appeal process before approaching the High Court.

Conclusion:
The court dismissed the writ petition, finding no illegality or infirmity in the notices issued under Section 148A(b) and the order passed under Section 148A(d). The petitioner was advised to pursue the statutory remedies available under the Income Tax Act. No order as to costs was made.

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