2023 (10) TMI 277 - HC - Income Tax

Reopening of assessment u/s 147 - Validity of order passed u/s 148A(d) - change of opinion - assessee has not produced any supporting documentary evidences in respect of the donation given - allegation of non sharing of the information/material purportedly relied upon in the impugned notice - HELD THAT - There is a specific purpose for not introducing any further enquiry or adjudication in the statute, on the correctness or otherwise of the information, at this stage. The reason for it is obvious. Under the scheme of the Act a detailed procedure has been provided u/s 148 for issuance of notice whereafter the assessing authority has to determine, in the manner specified, whether income has escaped assessment and the defence of assessee, on all permissible grounds, remains open to be pressed at such stage. The ultimate determination made by the Assessing Authority under Section 147 for reassessment is otherwise subject to appeal under Section 246-A of the Act. Merits of the information referable to Section 148A thus remains subject to the reassessment proceedings initiated vide notice under Section 148 of the Act. It is for this reason that issues which require determination at the stage of reassessment proceedings and in respect of which departmental remedy is otherwise available are not required to be determined at the stage of decision by the Assessing Authority under Section 149A(d). The scope of decision under Section 148A(d) is limited to the existence or otherwise of information which suggests that income chargeable to tax has escaped assessment. Thus, in our opinion, the impugned order under Section 148A(d) of the Act and notice under Section 148 would not warrant any interference under Article 226 of the constitution of India as challenge to such order would be available to an assessee while challenging the order passed in reassessment proceedings consequent to the notice issued under Section 148 of the Act. The Apex Court in the case of Anshul Jain Vs. Principal Commissioner, Income Tax 2022 (10) TMI 3 - SC ORDER observed What is challenged before the High Court was the re-opening notice under Section 148A(d) of the Income Tax Act, 1961. The notices have been issued, after considering the objections raised by the petitioner. If the petitioner has any grievance on merits thereafter, the same has to be agitated before the Assessing Officer in the re-assessment proceedings. High Court has rightly dismissed the writ petition. In view of the above, we find no merit in the challenge laid to the order dated 30.03.2023 passed under Section 148A(d) of the Income Tax Act, 1961 as well as to the notice dated 30.03.2023 under Section 148.

Summary

Issues involved:
The challenge to the impugned notice under Section 148A(b) of the Income Tax Act, the order under Section 148A(d), and the consequent initiation of reassessment proceedings for the Assessment Year 2016-17.

Details of the Judgment:

The petitioner, a charitable society, filed a return of income for Assessment Year 2016-17 declaring total income as Nil. Despite previous assessments and submissions, a notice under Section 148A(b) was issued, leading to the impugned order under Section 148A(d) based on information regarding donations given by the petitioner.

The petitioner argued that the reassessment proceedings were initiated merely on the basis of a change of opinion, which is impermissible in law. They contended that the order under Section 148A(d) was passed mechanically without proper application of mind and contravened the prescribed procedure under the Act.

In opposition, the Income Tax Department argued that the Assessing Officer found it a fit case to issue the notice under Section 148 based on new information regarding donations, which were not adequately addressed in the original assessment. They maintained that the petitioner can raise objections at the appropriate stage of the proceedings and that no prejudice is being caused.

The Court found merit in the submissions of the Income Tax Department, emphasizing that the Act does not require detailed adjudication at the stage of passing the order under Section 148A(d). The purpose is to determine whether income chargeable to tax has escaped assessment, with detailed procedures provided under Section 148 for further assessment and appeal.

The Court held that the impugned order and notice did not warrant interference under Article 226 of the Constitution, as challenges could be raised during reassessment proceedings. Citing a previous case, the Court dismissed the writ petition, finding no merit in the challenge to the orders passed under the Income Tax Act.

In conclusion, the Court found no basis for interfering with the impugned orders and dismissed the writ petition without costs.

This summary provides a detailed overview of the judgment, highlighting the key arguments presented by both parties and the Court's reasoning in reaching its decision.