2017 (6) TMI 24 - HC - Income Tax

Reopening of assessment - notice issued delayed - Held that - Delay in issuing a notice under Section 143(2) of the Act would be fatal to the re-assessment proceedings. See Assistant Commissioner of Income Tax & Anr. Versus M/s. Hotel Blue Moon 2010 (2) TMI 1 - SUPREME COURT OF INDIA - Decided in favour of assessee.

Summary

Issues:
Challenge to notice for re-opening assessment for AY 2009-10 under Section 148 of the Income Tax Act, 1961 and order disposing of objections to the initiation of proceedings under Section 147 of the Act.

Analysis:
The writ petition challenged a notice dated 22nd February, 2013, seeking to re-open the assessment for AY 2009-10 under Section 148 of the Income Tax Act, 1961. The petitioner also contested the order dated 20th January, 2014, disposing of objections to the initiation of proceedings under Section 147 of the Act. The petitioner, Indus Towers Limited, raised objections to the initiation of reassessment proceedings for AY 2009-10, requesting that the revised return filed on 31st March, 2010, should be considered as a response to the notice under Section 148 of the Act. The High Court had previously approved a scheme of merger involving the petitioner, leading to the cessation of existence of a previous entity. The petitioner argued that the proceedings were initiated without any legal basis and were unsustainable in law due to lack of material supporting the assumption of jurisdiction.

The petitioner further contended that the time limit for completing the assessment for AY 2009-10 had expired before the notice under Section 148 of the Act was issued on 22nd February, 2013. The petitioner argued that the delay in issuing a notice under Section 143(2) of the Act was fatal to the re-assessment proceedings, citing legal precedents to support this position. The respondent did not provide any explanation for the failure to issue the notice under Section 143(2) of the Act before the deadline. The Court agreed with the petitioner on this issue, holding that the delay in issuing the notice under Section 143(2) of the Act rendered the reassessment proceedings invalid.

In light of the above, the High Court quashed the impugned notice dated 22nd February, 2013, the order disposing of objections, and the reassessment proceedings. The writ petition was allowed with no order as to costs. The Court did not find it necessary to examine the first ground of challenge, as the second ground regarding the delay in issuing the notice under Section 143(2) of the Act was sufficient for the petitioner to succeed.