2023 (6) TMI 619 - HC - Income Tax

Validity of reopening of assessment - proceedings do not have the approval of the specified authority - according to revenue, the escaped income is below Rs.50,00,000/-, which is the threshold requirement provided under Section 149(1)(b) - HELD THAT - Revenue, cannot but accept that the escaped income, as noted by us on 02.05.2023, is below Rs.50 lakhs. It is also obvious that more than three years have elapsed, since the end of the Assessment Year (AY) in issue. We had indicated on 02.05.2023 that if the department were to give instructions to resist the petition, a counter-affidavit should be filed. No counter-affidavit has been filed. Therefore, we will have to accept, for the moment, that the assertions made in the writ petition on facts are correct. Revenue cannot but accept that if the facts as set out in the petition are correct, then the reassessment proceedings cannot progress further. Prayer made in the petition is allowed. Impugned notice issued u/s 148A(b) and the order passed u/s 148A(d) are quashed. Decided in favour of assessee.

Summary

Issues involved:
The issues involved in this judgment are related to the reassessment proceedings for Assessment Year (AY) 2017-18, specifically focusing on the approval of the specified authority and the threshold requirement under Section 149(1)(b) of the Income Tax Act, 1961.

Reassessment Proceedings:
The petitioner, represented by Mr. Nitin Gulati, raised concerns regarding the flaws in the reassessment proceedings, highlighting that the proceedings lacked the approval of the specified authority. Additionally, it was noted that the escaped income was below the threshold requirement of Rs.50,00,000 as per Section 149(1)(b) of the Income Tax Act, 1961. The respondents, represented by Mr. Aseem Chawla, acknowledged that the escaped income was indeed below Rs.50 lakhs. Moreover, it was observed that more than three years had passed since the end of the Assessment Year in question. Despite the opportunity to file a counter-affidavit, the department did not do so, leading the court to accept the correctness of the facts as presented in the writ petition.

Judgment and Disposition:
In light of the above, the court found in favor of the petitioner and allowed the prayer made in the petition. Consequently, the impugned notice issued under Section 148A(b) and the order passed under Section 148A(d) of the Income Tax Act, 1961 were quashed. The consequential notice issued under Section 148 of the Act was also quashed. The interim order was vacated, and the interlocutory application was closed. The writ petition was disposed of in accordance with the above terms.