Practical aspects: challenging notice for reassessment of escaped income.

[DEVKUMAR KOTHARI]

Practical aspects: challenging notice for reassessment of escaped income.

Experience shows that in case of reassessment in old schemes as well as present new scheme and provisions, department is in habit of initiating proceedings just to take an action is any information is received. Many times it is based on totally unrelated, unverified and not reliable information and statements of some authorities or other persons. This lead to litigation at different stages.

It is proper for assessee to challenge proceedings right from initial stage if there is some reason to challenge the same.

Underlying principals can be applicable under other direct and indirect tax laws and also in some civil  and criminal proceedings with suitable modifications as per facts of case and applicable law.

Reassessment proceeding under Income Tax Act,  can be declared void for the many reasons like:

a. Notice u.s.  148 issued by officer having no jurisdiction in the matter and notice being vague, uncertain, omnibus and not specific as to what Ld. AO want to do and whose income he want to reassess.

b.  without any tangible ,new and relevant material to suggest escaped income of assesse. And without providing such material to assessee and affording reasonable opportunity to submit his response and views on the same.

c.  Without independent application of mind of Ld. AO and just based on some report or information of other authority.

d. With a change of mind and change of view or opinion this  can apply even in cases of return processed u.s. 143.1 and no notice issued u.s. 143.2  though relevant information was on record in form of ITR, TDS return, TDS certificates issued by assessee and received by assessee,  various reports and  forms submitted by assessee, various reports available to the Ld. AO and on the portal of department before assessment was made in any of recognized  manner.

e.  Without proper, mindful approval of concerned authorities – approvals in hasty and mechanical manner .

f. other procedural and jurisdictional lapses.

Legal position on above aspects is well settled and all or many of  these  may be applicable  in  case of assessee / appellant.

Illustrative contentions and  grounds of appeal:

Contentions to challenge proceedings can be raised and it would be better to raise at initial stage itself so there is no difficulty in subsequent stage because it will not be a new issue or contention not raised before the Ld. AO. These can be suitably raised according to the forum where it is raised. For example:

1. For that notice u.s.148 issued by Physical/ Jurisdictional AO is void because notice u.s. 148 need to be issued by faceless AO in accordance with the requirement and jurisdiction conferred under the the e-Assessment of Income Escaping Assessment Scheme, 2022. Issued vide  NOTIFICATION NO. 18/2022 New Delhi, the 29th March, 2022 . Therefore .all proceedings pursuant to such notice are void. ( note this can also be if the notice is issued by any officer having no jurisdiction)

2. For that the notice u.s.148 is void being  vague, incomplete , without reasons, and without requisite satisfaction of the appropriate authority namely  ........ having jurisdiction in the matter. Therefore , all proceedings pursuant to such notice are void.

 3. For that the reasons recorded/ back ground material for issue of  notice u.s. 148 is based on doubts, presumptions, conjecture caused by some general enquiries and based on  some statements of persons having no concern with transactions of assessee  and in disregard of statutory, customary, written documentary evidences pertaining to assesse.

4. For that proceeding are without independent application of mind by authorities at different level like without application of independent mind by:  A. Ld.  AO while sending proposal or report and documents for approval through proper channel B. Ld. JCIT recommending issue of notice C. Ld. Pr. CIT approving issue of notice and the process has been completed in undue haste , mechanical manner and without proper application of mind.

5.  For that notices us 148 , 143.2 ,142, approvals  could  not be found and  authenticated  in search on  website in the portal in account of assessee and could not be authenticated with prescribed criterion for authentication  that is  with PAN of the assessee, AY, date and nature of document which are assessee  and event specific search criteria on website of IT Department. On the portal the process of search could not be completed so the initiation of re-assessment proceeding, enquiry, assessment order and demand notice may be non- est. due to these documents remaining not found not authenticated on portal of ITD.  Therefore these be declared void and non-est.

6. For that the notice has been issued With a change of mind and change of view or opinion though relevant information was on record in form of ITR, TDS return, TDS certificates issued by assessee and received by assessee,  various reports and  forms submitted by assessee, and other parties,  various reports available to the Ld. AO  on the portal of department before assessment was made in any of recognized  manner.

 ( this apply even in cases of return processed u.s. 143.1 and no notice issued u.s. 143.2  if relevant information was on record at the time of issue of intimation)

7.  For that the notices issued,  assessment order framed,  consequent demand notice and other proceedings initiated  are void ab initio. The same deserves be so declared. Kindly declare them void ab initio.

To substantiate these contentions assessee should make efforts to obtain copy of all relevant documents from department and closely examine them at various places of documents like letter head, signature, dates, contents of working paper and document etc.

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