2023 (4) TMI 1179 - HC - Income Tax

Reopening of assessment u/s 147 - Validity of second notice of reopening - whether it was permissible in law for the assessing officer to issue the second notice u/s 148 of the Act when once there was already a notice issued in exercise of the same powers under the very provision in respect of the same assessment year 2012-13? - HELD THAT - Supplying the reasons as to why the second notice under section 148 for reopening of the assessment would be impermissible, the Division Bench observed that as long as the assessment was at large by virtue of the first notice of reopening, the question of issuing second notice for the same purpose would not arise. The observations in the decision in Aditya Medisales Ltd. 2016 (8) TMI 1235 - GUJARAT HIGH COURT reflect that the Court was not oblivious of the aspect that in a given case where second notice for reopening was set aside, a piquant situation for the revenue may arise. Position of law enunciating from the decision in Aditya Medisales Ltd. (supra), the petitioner is entitled to succeed. The impugned notice dated 30.03.2019 under Section 148 of the Act, which is a notice for reopening the assessment for the same year under consideration cannot sustain. The same is liable to be set aside.

Summary

Issues involved:
The judgment addresses the legality of issuing a second notice under Section 148 of the Income Tax Act, 1961 for reopening assessment when a notice has already been issued for the same assessment year.

Summary:

Issue 1: Reopening of Assessment
The petitioner sought to set aside a Notice issued under Section 148 of the Income Tax Act, 1961 for the assessment year 2012-13, claiming that the assessing officer sought to reopen the assessment based on reasons to believe that income had escaped assessment.

Issue 2: Legal Permissibility of Second Notice
The question raised was whether it was lawful for the assessing officer to issue a second notice under Section 148 for the same assessment year when a previous notice had already been issued. The Division Bench's decision in Aditya Medisales Ltd. vs. Deputy Commissioner of Income Tax was cited to determine the legality of issuing a second notice for reassessment.

The Division Bench highlighted that once a notice is issued under Section 148, the assessment is reopened, and any further notice for the same purpose is impermissible until the assessment is completed. The Court emphasized that there cannot be two parallel assessments based on multiple notices for the same purpose.

The judgment concluded that the second notice for reopening the assessment for the same year cannot be sustained under the law. The impugned Notice dated 30.03.2019 was set aside, and the petition was allowed.

The petitioner's advocate suggested that the department could consider the grounds mentioned in the second notice, even though the second notice for reopening was deemed impermissible. The Court advised that if the department had relevant records, they could pursue them in accordance with the law.