2022 (12) TMI 188 - HC - Income Tax

Reopening of assessment u/s 147 - notice issued to the Petitioner-Assessees u/s 148-A(1)(b) - personal hearing was not given to the Assessee prior to the passing of the said order - HELD THAT - Having carefully examined the said decisions in light of the order passed by the Supreme Court in Anshul Jain v. Principal Commissioner of Income Tax 2022 (10) TMI 3 - SC ORDER this Court is of the considered view that the above order cannot be considered to be one which does not decide any issue or which has been passed without considering the issue involved in the case. This Court is unable to agree with the submission that the aforementioned order of the Supreme Court is not a binding precedent as far as this Court is concerned. Petitioners have also assailed both the notice u/s 148-A(1)(b) as well as the consequential order u/s 148-A(1)(d) on several grounds including the ground of limitation, not considering the objections filed, not providing a personal hearing, non-application of mind to the peculiar facts of each case and several other grounds. Following the decision of the Supreme Court in Anshul Jain v. Principal Commissioner of Income Tax (supra), all these grounds could be urged at a stage when an order is passed u/s 148 in the reassessment proceedings and if it warrants challenge by these Petitioners/Assessees. This Court would hasten to add that not only will all the grounds urged before this Court in these proceedings be available to the Petitioners to be urged at such a stage of challenge, but all other grounds which may not have been urged before this Court and which may be found necessary to be urged at that stage in accordance with law. When such challenge is raised, all such grounds will have to be dealt with in accordance with law by the Authority which is expected to pass an appropriate order under Section 147 read with Section 148.

Summary

Issues:
Challenge to notice under Section 148-A(1)(b) of the Income Tax Act, 1961 and consequential order under Section 148-A(1)(d) of the Act.

Analysis:
1. The writ petitions challenged the notices issued to the Petitioner-Assessees under Section 148-A(1)(b) of the Income Tax Act, 1961, and the consequential orders passed under Section 148-A(1)(d) of the Act.
2. Interim orders were issued restraining the Respondent/Income Tax Department from taking coercive action against the Petitioners during the pendency of the petitions.
3. Previous judgments by a Division Bench of the Orissa High Court and the Punjab and Haryana High Court held that challenges to such notices and orders could be raised during reassessment proceedings, not at the stage of the orders under Section 148-A(1)(d) of the Act.
4. The Supreme Court dismissed a Special Leave Petition challenging a similar order, stating that if the Assessee has grievances on merits, they should be raised during reassessment proceedings.
5. Despite the Supreme Court's order, the Calcutta High Court and the Punjab and Haryana High Court issued conflicting decisions on similar challenges, leading to varied interpretations.
6. The Petitioners argued that the Supreme Court's order should not be binding as a precedent, citing various judgments, but the Orissa High Court found the Supreme Court's order to be a binding precedent.
7. The Petitioners raised multiple grounds of challenge, including limitation, lack of personal hearing, and non-application of mind, which could be addressed during reassessment proceedings under Section 148 of the Act.
8. The Court emphasized that all grounds raised in the writ petitions would be available for challenge during reassessment proceedings, along with any additional grounds deemed necessary.
9. It was clarified that all grounds raised during reassessment proceedings must be dealt with in accordance with the law by the relevant authority under Section 147 read with Section 148 of the Act.
10. Consequently, the Court disposed of all the writ petitions and lifted all interim orders, allowing the challenges to be addressed during the reassessment proceedings as per the law.