Point of Law: Section 149 reads as no notice under section 148 shall be issued for relevant assessment year.

ORDER :

The petitioner has challenged the order at Annexure-'A' dated 21.03.2023 passed under Section 148A(d) of the Income Tax Act, 1961 ('I.T. Act' for brevity) for the Assessment Year 2016-2017 and has also sought for quashing of the impugned notice dated 21.03.2023 bearing DIN and Notice No. ITBA/AST/S/148_1/2022-23/1051076610(1) issued by respondent No.1 under Section 148 of the I.T. Act for the Assessment Year 2016-2017 at Annexure-'B'.

2. On 03.03.2023, the notice under Section 148A(b) of the I.T. Act came to be issued to the petitioner stating that information was received which suggested that income chargeable to tax for the Assessment Year 2016-2017 has escaped assessment within the meaning of Section 147, detailing the information alongwith the supporting documents. The information is detailed in the Annexure in the form of a table, which is extracted below :

This was followed up with another notice on 10.03.2023.

3. The petitioner is stated to have made out a reply to the said notice dated 16.03.2023 in which details were laid out, setting out the sale consideration relating to the sale deed of 22.11.2015 as Rs.55,77,700/- and also furnishing details of the sale deed by virtue of which the petitioner has purchased the property on 24.09.2011 for consideration of Rs.15,91,735/-(cost of acquisition). It was submitted that since the date of acquisition was in the year 2011 and the sale was in the year 2015 and therefore the long term capital gain would be as follows :

4. The 'Capital Gain', according to the petitioner in terms of the reply made out is Rs.33,85,769/-. It was submitted that, as the income escaping assessment did not exceed rupees fifty lakh in terms of Section 149(1)(b) of the I.T. Act, the notice under Section 148 could not be issued.

5. It is the submission of learned counsel for the petitioner that the notice under Section 148 at Annexure-'B' was issued on 21.03.2023 with respect to the Assessment Year 2016-2017 and the time limit for issuance of such notice in terms of Section 149(1)(a) would be three years from the end of the relevant Assessment Year and if the Department seeks to justify the issuance of notice in the extended time provided under Section 149(1)(b) beyond three years, but not more than ten years, the Department would have to demonstrate that the 'income chargeable to tax' which has escaped assessment is likely to amount to rupees fifty lakh or more.

6. It is further submitted that in the present case, as demonstrated in the reply since the income chargeable to tax calculated in terms of Section 48 would be less than rupees fifty lakh, the notice issued on 21.03.2023 in respect of the Assessment Year 2016-2017 would not fall within the extended time provided under Section 149(1)(b) of the I.T. Act.

7. Learned counsel appearing for the Revenue would submit that since the proceedings under Section 148 of I.T. Act is at the initial stage and adjudication is to take place in terms of the procedure prescribed and provided under Section 148A, it would be premature to construe the contention relating to 'income chargeable to tax' as contended by the petitioner and that the income that has escaped assessment to be taken note of for the purpose of Section 149(1)(b) which would be the total sale consideration received as reflected in the sale deed dated 22.12.2015 of Rs.55,77,700