The High Court dismissed a writ petition challenging a re-opening notice under Section 148 of the Income Tax Act, 1961. The court held that the notice was valid as the information triggering the action was received post-assessment, rendering the earlier assessment order non-erroneous under settled law.
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PURTI PRASAD PARAB
Digitally signed by PURTI PRASAD PARAB Date: 2021.12.23 17:49:49 +0530
IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. 3158 OF 2019
Surendrakumar Balkishandas Agarwal….Petitioner
V/s.
Union of India and Ors.…Respondents
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Mr. Devendra H. Jian a/w Mr. Naresh Jain and Ms. Neha Anchlia i/b Agrud
Partners for Petitioner.
Mr. Suresh Kumar for Respondents.
----
CORAM : K.R. SHRIRAM &
AMIT B. BORKAR, JJ.
DATED : 22nd DECEMBER, 2021
P.C. :
1.Petitioner is impugning re-opening notice dated 20th March,
2019 and an order dated 8th November, 2019 rejecting petitioner's
objections to re-opening.
2.According to Mr. Jain the notice itself would not have been
issued because as per 3rd Proviso to Section 147 of the Income Tax Act, 1961
(the Act) which was then in force, the Assessing Officer cannot assess or
re-assess income which is the subject matter of any appeal, reference or
revision. According to Mr. Jain the reasons for re-opening indicate that
petitioner had traded in penny stock and the same was subject to revision
under Section 263 of the Act and therefore notice under Section 148 of the
Act as given could not have been issued.
Purti Parab
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3.We have to note that the proceedings under Section 263 of the
Act which was commenced on 31st January, 2019 by issuing show cause
notice to petitioner was dropped by the Commissioner by an order dated
18th March, 2019. In the affidavit in reply an internal Office Note is
annexed which gives the reason for dropping under Section 263 of the Act
which reads as under :
NOT FOR ASSESSEE
Office Note : Proceedings u/s 263 are dropped as the
information that is trigger for proposed action came on
04.12.2017 i.e. after passing of order u/s 143(3) dated
30.11.2016. Therefore the then AO was not aware of
information, so that he would use in the assessment. On the
basis of prima facie details filed by assessee during the
assessment proceedings, no one could ordinarily come to
conclusion that further enquiry was required. As the
information vide letter dated 04.12.2017 is the trigger for action
in AY 2015-16, the same information is also trigger for AY 2014-
15. It is settled law that if some information is received after
passing of assessment order, the order passed previous to such
receipt cannot be construed as erroneous & hence proceedings
u/s 263 are hereby dropped.
4. Therefore, we find nothing wrong in the notice issued under
Section 148 of the Act.
5. Petition dismissed.
(AMIT B. BORKAR, J.)
(K.R. SHRIRAM, J.)
Purti Parab
2 issues framed by the court
Whether a notice under Section 148 of the Income Tax Act, 1961 could be issued given that the information triggering the re-opening notice was received after the assessment order under Section 143(3)
Whether the proceedings under Section 263 of the Act dropped due to the timing of information reception justify the issuance of a notice under Section 148.
3 provisions across 1 enactments
Surendrakumar Balkishandas Agarwal
Union of India
K.R. Shriram
Amit B. Borkar
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court