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IN THE HIGH COURT OF DELHI AT NEW DELHI
Rajiv Shakdher, Girish Kathpalia, JJ.
Upes (formerly Known As University of Petroleum And Energy Studies) – Appellant
Versus
Assistant Commissioner of Income Tax & Ors. – Respondents
W.P.(C) 7377 of 2023
Decided On : 26-05-2023
Income Tax Act - Challenge to notices issued under Section 148A(b) and Section 148 - [Section 148A(d), Section 148A(b), Section 148] - The court allowed the petition subject to filing legible copies of annexures. The challenge to the notices issued under Section 148A(b) and Section 148 was considered. The court held that the notice dated 23.05.2022 issued under Section 148A(b) of the Act was sustainable, as the limitation for the Assessment Year 2019-20 had not expired at the relevant time. The court also directed the assessing officer to consider the record of earlier assessment years before passing the assessment order, emphasizing the principle of consistency in reasons for reopening assessments.
Fact of the Case:
The writ petition challenged the order dated 30.07.2022 passed under Section 148A(d) of the Income Tax Act, 1961, and the consequential notices issued under Section 148 of the Act. The petitioner contended that the notices were unsustainable in law and that the reasons for triggering reassessment proceedings were not different from those for earlier assessment years.
Finding of the Court:
The court found that the notice dated 23.05.2022 issued under Section 148A(b) of the Act was sustainable, as the limitation for the Assessment Year 2019-20 had not expired at the relevant time. The court also directed the assessing officer to consider the record of earlier assessment years before passing the assessment order, emphasizing the principle of consistency in reasons for reopening assessments.
Issues: The issues involved the sustainability of the notices issued under Section 148A(b) and Section 148, and the consideration of reasons for triggering reassessment proceedings for the Assessment Year 2019-20.
Ratio Decidendi: The court held that the notice dated 23.05.2022 issued under Section 148A(b) of the Act was sustainable, as the limitation for the Assessment Year 2019-20 had not expired at the relevant time. The court also emphasized the principle of consistency in reasons for reopening assessments.
Final Decision: The writ petition was disposed of, and the assessing officer was directed to consider the record of earlier assessment years before passing the assessment order, emphasizing the principle of consistency in reasons for reopening assessments.
JUDGMENT
Rajiv Shakdher, J. (Oral)
CM APPL. 28735/2023
1. Allowed, subject to the petitioner filing legible copies of the annexures.
W.P.(C) 7377/2023 & CM APPL. 28734/2023 [Application filed on behalf of the petitioner for interim relief]
2. Issue notice.
3. Mr Aseem Chawla, learned senior standing counsel, who appears on behalf of the respondents/revenue, accepts notice.
4. In view of the directions that we propose to issue Mr Chawla says that he does not wish to file a counter-affidavit in the matter, and he will argue the matter based on the record presently available to the court.
5. Therefore, with the consent of the counsel for parties, the writ petition is taken up for hearing and final disposal, at this stage itself.
6. This writ petition is directed against order dated 30.07.2022 passed under Section 148A(d) of the Income Tax Act, 1961 [in short, "Act"]. Besides this, challenge is also laid to the consequential notice dated 31.07.2022 issued under Section 148 of the Act. 5.1 In addition, the petitioner has also assailed the notice dated 07.06.2021 issued under Section 148 of the Act and the intimation letter dated 23.05.2022 which is, in effect, a notice under Section 148A(b) of the Act.
7. Mr Rohit Jain, learned counsel who appears on behalf of the petitioner, makes two broad submissions in support of the petitioner's case.
(i) First, the notice dated 23.05.2022 issued under Section 148A(b) of the Act is unsustainable in law. According to Mr Jain, in the said notice, there is a reference to the decision of the Supreme Court rendered in Union of India vs Ashish Aggarwal, (2022) 444 ITR 1 (SC). It is Mr Jain's contention that limitation for the Assessment Year (AY) in issue, i.e., AY 2019-20, would have expired, at the relevant time, only on 31.03.2023. Therefore, the respondents/revenue could not have taken recourse to the leeway granted via the aforementioned judgment of the Supreme Court.
(ii) Second, the genesis of the reassessment triggered against the petitioner is a survey which was conducted on 22.12.2020 qua the petitioner and "other persons". It is contended that because of the survey, reassessment proceedings were triggered for AYs 2013-14 to 2017-18.
8. Mr Jain says that a perusal of the record concerning AYs 2013-14 to AY 2017-18 would show that the reasons which propelled the Assessing Officer (AO) to initiate proceedings under Section 147-148 of the Act, were not different from those which have triggered reassessment proceedings for AY 2019-20.
9. As a matter of fact, Mr Jain says that the regular assessment carried out in AY 2018-19 and scrutiny assessment carried out in AY 2020-21, also dealt with the issues which are subject matter of the AY with which the instant writ petition is concerned, i.e., 2019-20.
10. In sum, it is Mr Jain's contention that these aspects were put to the AO by the petitioner in his communication dated 13.06.2022, have not been considered by the AO while passing the order dated 30.07.2022, under Section 148A(d) of the Act.
11. Mr Chawla says, insofar as the first contention advanced by Mr Jain is concerned that the same is unsustainable in law. It is Mr. Chawla's contention that since limitation had not expired at the relevant point in time, the notice dated 23.05.2022 issued under Section 148A(b) of the Act is sustainable, notwithstanding reference, as contended by the Mr Jain, to the judgment of the Supreme Court in Ashish Aggarwal's case.
12. Insofar as the other aspect is concerned, Mr Jain says that since an assessment order has not been passed for AY 2019-20, the AO could consider the record of the earlier AYs and the reasons for dropping the proceedings to which Mr. Jain has made a reference.
13. We have heard learned counsel for the parties. We are in agreement with Mr Chawla that the notice dated 23.05.2022 issued under Section 148A(b) of the Act cannot be declared as being untenable in law, since even according to Mr. Jain, the limitation qua AY 2019-20 would
The principle of consistency in reasons for reopening assessments is crucial in determining the sustainability of notices issued under the Income Tax Act.
The main legal point established in the judgment is the requirement for the assessing officer to consider the record of earlier assessment years and apply the principle of consistency when the reason....
The principle of consistency in reasons for reopening assessments across different assessment years is crucial, and the Assessing Officer must apply this principle before passing the assessment order....
Point of Law : Implementation/ clarified by Instruction issued by Ministry of Finance, Department of Revenue, Central Board of Direct Taxes, in exercise of powers under Section 119 of Act, 1961.
Notices issued under Section 148 of the Income Tax Act beyond the limitation period are illegal and void, leading to the quashing of all consequential orders.
Notices issued for reassessment under the Income Tax Act must adhere to statutory time limits; those issued beyond the time limit are considered invalid.
Notices issued under sections 148 and 148A(d) of the Income Tax Act beyond the specified limitation period are invalid and subject to quashing.
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