2022 (5) TMI 337 - HC - Income Tax

Reopening of assessment u/s 147 - Scope of new provision section 148A - challenge to issuance of impugned notice u/s 148 on the grounds that the same is barred by limitation and that the respondent-income tax authority concerned, before issuing the impugned notices u/s 148 has not observed the statutory formalities under section 148A as prescribed by the Finance Act, 2021 which are applicable with effect from 1st April 2021 before issuance of notices under section 148 of the 1961 Act on or after 1st April 2021 - HELD THAT - As considered view that this case clearly falls under the amended Act relating to proceedings under section 147 of the Act under which issuance of notice under section 148A of the Act is mandatory before issuing any notice under section 148 of the amended Act which has not been complied with in this case. Considering the above facts and circumstances of the case and in view of the order of this court in the case of Bagaria Properties and Investment Private Limited Anr. 2022 (1) TMI 742 - CALCUTTA HIGH COURT and also in the case of Monoj Jain 2022 (1) TMI 741 - CALCUTTA HIGH COURT the impugned notice under section 148 of the Act and all subsequent proceedings are not sustainable in law and the same are quashed. However, quashing of the impugned notice and proceeding will not debar the respondent-authority concerned to issue any fresh notice in future in accordance with law. This writ petition is allowed subject to payment of costs of Rs.5,000/- to the Calcutta High Court Legal Services Committee, since the impugned notice under section 148 of the Income Tax Act, 1961 has been issued on 31st March, 2021 as appears from record and this writ petition has been filed in April 2022, that is, almost after ten months from receipt of the impugned notice, without any explanation for such delay in filing this writ petition

Issues:
1. Impugned notice under section 148 of the Income Tax Act, 1961.
2. Compliance with statutory formalities under section 148A of the 1961 Act.
3. Date of issuance of the notice.
4. Validity of the impugned notice and subsequent proceedings.
5. Payment of costs and delay in filing the writ petition.

Analysis:

1. The petitioner challenged the impugned notice issued under section 148 of the Income Tax Act, 1961, contending that it was barred by limitation and that the respondent-income tax authority failed to observe the statutory formalities under section 148A of the Act as mandated by the Finance Act, 2021.

2. The respondent claimed that a final assessment order had been passed, and although the notice appeared to be signed on March 31, 2021, it was actually uploaded for communication on April 1, 2021. The court noted the requirement of compliance with section 148A before issuing any notice under section 148 of the amended Act.

3. Citing previous judgments, the court found that the impugned notice and subsequent proceedings were not sustainable in law due to non-compliance with the statutory formalities. The court referred to cases such as Bagaria Properties and Investment Private Limited v. Union of India and Monoj Jain v. Union of India to support its decision.

4. The court quashed the impugned notice and proceedings but clarified that the respondent-authority could issue a fresh notice in the future in accordance with the law. The petitioner was directed to pay costs of Rs.5,000 to the Calcutta High Court Legal Services Committee due to the delay in filing the writ petition without any explanation.

5. The costs were to be utilized for the benefit of children in a correctional home in West Bengal. The court disposed of the writ petition with these observations and scheduled a compliance hearing for a later date.

This detailed analysis covers the issues raised in the judgment, highlighting the key arguments, findings, and directives of the court.

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