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.

JUDGMENT :

(Deepak Roshan, J.)

Heard learned counsel for the parties.

2. The instant application has been preferred by the petitioner praying therein for quashing and setting aside the notice dated 21.07.2022 passed by respondent no. 3 under Section 148 of Income Tax Act, 1961 for the Assessment Year 2016-17 and also for quashing and setting aside the order dated 21.07.2022 passed by respondent no. 4 under Section 148A(d) of the Income Tax Act, 1961 for the Assessment Year 2016-17.

Petitioner has also challenged the reassessment order dated 31.05.2023 passed by respondent no. 3 against this petitioner under Section 147 of the Act for the Assessment Year 2016-17 and the consequential Notice of Demand dated 31.05.2023, which has been issued pursuant to the reassessment order for an amount of Rs. 50,27,860/-issued by respondent no. 3.

3. The brief facts of the case as indicated in the writ application is that the petitioner is a Private Limited Company registered under the Companies Act, 2013. One notice dated 30.06.2021 under Section 148 of the Act for the Assessment Year 2016-17 was issued to the petitioner. Pursuant thereto, the petitioner asked the department for reason to believe vide letter dated 22.07.2021. Thereafter, the Revenue issued a letter on 30.05.2022 deemed to be a notice under Section 148A(b) of the Act. However, no information and material relied upon by the respondent department were provided to the petitioner. In spite of that, vide letter dated 04.06.2022, the petitioner gave a detailed reply raising objection and pointed out major discrepancies.

4. Consequent to the submission of aforesaid reply, the respondent department had issued fresh notice to show-cause dated 22.06.2022, wherein the petitioner was requested to provide certain documents. In compliance to the aforesaid notice dated 22.06.2022, the petitioner on 28.06.2022 had replied and submitted relevant documents and complied the requirement of notice to show-cause. However, the respondent department had passed the impugned order on 21.07.2022 under Section 148A(d) of the Act and on the same date i.e., 21.07.2022 notice under Section 148 of the Act was also issued for reassessment for the Assessment Year 2016-17 and finally reassessment order was passed on 31.05.2023 against this petitioner and consequential Notice of Demand was also issued.

5. Learned counsel for the petitioner has assailed the impugned notices/orders on following grounds:

(A) Impugned Notice dated 21.07.2022 U/s 148 of the I.T Act, 1961 has been issued beyond limitation period prescribed U/s 149 of the I.T Act, 1961 and thus is time barred and void.

(B) Impugned Notice dated 21.07.2022 u/s 148 of the I.T Act, 1961 and also the Impugned Order dated 21.07.2022 u/s 148A (d) have been issued without the approval of the prescribed authority under Section 151 of the I.T Act, 1961.

(C) The Impugned Order dated 21.07.2022 was passed without considering the replies dated 04.06.2022 and 28.06.2022 filed by the Petitioner.

(D) Impugned Order dated 21.07.2022 and Impugned Notice dated 30.05.2022 has been passed/issued without providing the detailed information and material/documents to the Petitioner.

Relying upon the aforesaid submissions, he prays that the entire reassessment proceeding be quashed and set aside and all consequential orders passed pursuant to issuance of Notice under U/s 148 of the I.T Act, 1961 which has been issued beyond limitation period prescribed U/s 149 of the I.T Act, 1961, be also quashed.

6. In support of his contention, learned counsel has relied upon the following decisions:

(i) Sanath Kumar Murali Vs. Income-tax Officer reported in (2023) 152 taxmann.com 231 (Karnataka);

(ii) Siemens Financial Services Pvt. Ltd. Vs. Deputy Commissioner of Income Tax & Ors. [Writ Petition No. 4888 of 2022];

(iii) Kartik Sureshchandra Gandhi Vs. Assistant Commissioner of Income-tax reported in (2023) 154 taxmann.com 193 (Bombay)

(iv) M/s. Chotanagpur Diocesson Trust Asson. Vs. Union o