2023 (6) TMI 1286 - HC - Income Tax

Reopening of assessment - income of the petitioner HUF be not made subject matter of re-assessment - petitioner while taking exception to the impugned notice and order inter alia submits that subsequent to allotment of new PAN Card in the year 2016 it has all along been filing returns of the income for the succeeding assessment years including 2016-17 with new PAN Card number and amount allegedly deposited in the bank maintained by the petitioner has been well reflected in the return filed for the assessment year 2016-17 and assessed HELD THAT - There is no jurisdictional error on the part of the Assessing Officer while he passed the impugned order under clause (d) of Section 148A. Nevertheless, it is apposite to observe that the order passed under clause (d) of Section 148A is not the substitute of the order of assessment if any to be passed by the AO during the course of the re-assessment proceedings. AO is statutorily obliged to look into the entire material placed before him before he reaches the conclusion that the income found has escaped assessment warranting re-assessment and tax thereupon. Consequently, we though decline to interfere but direct the Assessing Officer to extend liberty to the petitioner to file complete documents with reference to and in context of the amount found deposited in the bank account of the petitioner mentioned above and such other documents as he may be advised to file. The Assessing Officer is hereby directed to process reassessment with due advertence to the record placed before him, pursuant to the notice under Sec.148.

Summary

Issues involved:
The issues involved in the judgment are the validity of the notice issued under Section 148 of the Income Tax Act for re-assessment of the income of the petitioner HUF for the Assessment Year 2016-17, and the order passed under clause (d) of Section 148A of the Income Tax Act.

Validity of Notice for Re-assessment:
The petitioner, an assessee with Permanent Account Number (PAN) AAOHP9851J, challenged the notice dated 31.03.2023 issued under Section 148 of the Income Tax Act, 1961, calling for re-assessment of the income of the petitioner HUF for the Assessment Year 2016-17. The petitioner contended that subsequent to the allotment of a new PAN Card in 2016, returns for the income of succeeding assessment years, including 2016-17, were filed with the new PAN Card number. The petitioner argued that the amount deposited in the bank account maintained by them was duly reflected in the return filed for the assessment year 2016-17 and assessed, thus making the re-assessment proceedings unnecessary.

Contentions of the Parties:
The counsel for the petitioner argued that the re-assessment proceedings were unwarranted due to the proper filing of returns with the new PAN Card number. On the other hand, the Standing Counsel for the Income Tax Department contended that the Assessing Officer had prima facie formed an opinion justifying the re-assessment proceedings based on discrepancies, such as the mismatch between the PAN Card holder's name and the account holder's name, and the location disparity of the account.

Judicial Decision:
The Court refrained from commenting on the merits of the case but found no jurisdictional error in the Assessing Officer's decision to initiate re-assessment proceedings. The Court clarified that the order under clause (d) of Section 148A of the Income Tax Act is not a substitute for the final assessment order. The Assessing Officer was directed to allow the petitioner to submit complete documents related to the deposited amount in the bank account and any other necessary documents. The Assessing Officer was instructed to conduct the reassessment process diligently based on the records provided, in accordance with the notice dated 31.03.2023.

Conclusion:
The writ petition was disposed of, with the Court emphasizing that it had not expressed any opinion on the merits of the case. The Assessing Officer was directed to proceed with the reassessment process while giving the petitioner the opportunity to submit relevant documents for consideration.