Point of Law: Income Tax – Assessment – Issuance of notice - notice under Section 148 was issued by an AO while the order recording reasons was issued by another officer is not borne out from the record – No interference

JUDGMENT :

Rajiv Shakdher, J.

TABLE OF CONTENTS

Preface ............................................................................................................... 2

Background facts ............................................................................................... 2

Submissions made on behalf of the assessee ...................................................... 5

Submissions advanced on behalf of the Revenue ............................................... 7

Analysis and Reasons ...................................................................................... 10

Conclusion ....................................................................................................... 20

Preface: -

1. This writ petition is directed against notice dated 31.03.2018, issued under Section 148 of the Income Tax Act, 1961 [hereafter referred to as ‘the Act’], and the sanction accorded by respondent no. 2 i.e. the Principal Commissioner of Income Tax, Delhi-VIII on 29.03.2018 for issuance of notice under Section 148 of the Act. The assessee, being aggrieved, has moved this court via the instant writ petition.

Background facts: -

2. To adjudicate upon the writ petition, the following broad facts are required to be noticed:

2.1. The assessee before us is a private limited company going by the name Synfonia Tradelinks Pvt. Ltd. The assessee was incorporated on 28.05.1993 under the Companies Act, 1956 albeit under the name Synfonia Pharmaceuticals Pvt. Ltd. On 31.03.2015, the assessee changed its name to Synfonia Tradelinks Pvt. Ltd.

2.2. The income tax return for the assessment year [in short ‘AY’] 2010-2011 along with the balance sheet as on 31.03.2010 was filed by the assessee, on 23.09.2010.

2.3. Insofar as the succeeding year was concerned, which is also the AY in issue i.e. AY 2011-2012, the income tax return was filed on 29.08.2012 by the assessee along with the balance sheet as on 31.03.2011. Returns for the aforementioned AY(s) were filed via electronic mode.

2.4. On 31.03.2018, which was the last date on which the limitation was to expire, a notice under Section 148 of the Act was issued by respondent no.1, wherein respondent no.1 inter alia stated that he had reason to believe that income chargeable to tax qua AY 2011-2012 had escaped assessment within the meaning of Section 147 of the Act. Accordingly, the assessee was directed to file a return in the prescribed form for the said AY as respondent no.1 proposed to assess/re-assess the income/loss for the concerned AY.

2.5. The record shows that the assessee had, perhaps, written to respondent no.1 on 03.04.2018 to close the reassessment proceedings as the notice under Section 148 qua AY 2011-2012 was time-barred having been served upon him after the expiry of the prescribed limitation. As indicated above, the limitation for issuance of notice expired, concededly, on 31.03.2018. This aspect finds mention in the assessee’s communication dated 23.04.2018 addressed to respondent no.1. Besides this, the said communication went on to state, that without prejudice to its contention that the notice under Section 148 of the Act was time-barred, it had enclosed a copy of the income tax return qua AY 2011-2012.

2.6. In addition to the aforesaid, the assessee also called upon respondent no.1 to furnish a copy of the reasons based on which he believed that the assessee’s income for AY 2011-2012 had escaped assessment. The communication concluded with a request to respondent no.1 to furnish a copy of the approval, granted by respondent no.2, for initiating proceedings under Section 147 of the Act.

2.7. Since respondent no.1 did not furnish a copy of the proceedings in which he had documented his reasons for initiating proceedings under Section 147 of the Act, the assessee escalated the matter, by writing to the Assistant Commissioner of Income Tax [in short ‘ACIT’] vide communication dated 09.06.2018. In this communication, while flagging the issue that the assessee has not been furnished reasons