Indicating a sign of relief to the taxpayers in Income Tax Reassemment proceedings, various High Courts (Delhi, Bombay, Allahabad and Calcutta) have granted interim relief/relief to the tax payers.

Notices u/s 148 for the AY 2013-14 & AY 2014-15 can be challenged in Writ Jurisdiction, on the ground of being time barred as per proviso to S. 149.

Cases:

  1. Hon’ble Punjab & Haryana High Court in Kulwant Singh v. UOI CWP 18032/2022 has stayed the proceedings initiated under S. 148, issued in April, 2021 for the AY 2013-14 for being beyond limitation. The interim relief has been granted in view of the proviso to S. 149, which specifically provides that no notice under S. 148 shall be issued if such notice could not be issued earlier on account of being beyond the time limit as per unamended S. 149(1)(b).
  1. Hon’ble Bombay High Court in W.P 25635 of 2022 has stayed proceedings of reassessment initiated by notice u/s 148, issued in April, 2021 and consequential 148A(b) notice, 148A(d) order and 148 Notice, for the AY 2014-15 on the ground of being time barred.
  2. Hon’ble Calcutta High Court in W.P.A 19111 of 2022 has stayed proceedings of reassessment initiated by notice u/s 148, issued in April, 2021 and consequential 148A(b) notice, 148A(d) order and 148 Notice, for the AY 2014-15 on the ground of being time barred.

Notices u/s 148 upto to the AY 2017-18 alleging escapement of income which is less than Rs. 50 lacs  can be challenged in Writ Jurisdiction, on the ground of being time barred as per S. 149(1)(a).

Case:

  1. Hon’ble Delhi High Court in W.P(C) No. 11527/2022 has granted an interim relief in proceedings under S. 148 for the AY 2017-18, for being beyond the period of 3 years as per S. 149(1)(a) of the Act. The provisions of Section 149(1)(a) which are in effect from 01.04.2021, prevent the issuance of notice under S. 148 beyond the period of 3 years if the income is less than Rs. 50 Lacs.

Notices u/s 148 can be challenged in Writ Jurisdiction, on the grounds of violation of PNJ, non-application of mind, non-verification of information available on the insight portal, relied upon information not provided to the assessee etc.

Cases:

  1. Hon’ble Allahabad High Court in Writ Tax No. 723 of 2022 has quashed the notice u/s 148A(b), order u/s 148A(d) and notice u/s 148 as also imposed the Cost of Rs. 50 Lacs on the Department. In the above mentioned case, the Hon’ble High Court has noted that the Assessing Officer is initiating the reassessment proceedings on the basis of information available on the insight portal, without verifying the genuineness and in gross violation of PNJ.The High Court has issued directions to the UOI w.r.t:
  • proper mechanism to be put in place so that information available on the insight portal is verified in reality and not as an empty formality;
  • strict action against the Officer who do not observe provisions of IT Act, fails to discharge the quasi-judicial functions or act in complete violation of PNJ.
  1. Hon’ble Calcutta High Court in M.A.T. No. 917 of 2022 has set aside the notice u/s 148A(b) and order u/s 148A(d) on the grounds that the information relied upon by the Department was not provided to the assessee with notice u/s 148A(b). The Department provided the information only with the Order u/s 148A(d). Setting aside the proceedings, the Hon’ble High Court has held that there is clear violation of PNJ.
  2. Hon’ble Delhi High Court in *W.P.(C) No. 7406/2022* has set the reassessment proceedings for being cryptic in nature; for not considering the detailed submissions of the assessee; for not sharing the information relied upon while reopening the assessment; and for not giving reasonable time to furnish reply to the Notice u/s 148A(b)

Notices u/s 148 can be challenged in Writ Jurisdiction, on the grounds of that reasons/grounds in notice u/s 148A(b) and Order under Section 148A(d) are different and distinct.

  1. Hon’ble Delhi High Court in W.P(C) No. 11338/2022 has set aside the notice u/s 148A(b) and Order u/s 148A(d) for being issued on two separate and distinct grounds.
  2. Hon’ble Delhi High Court in W.P(C) No. 11964/2022 has granted interim relief in reassessment proceedings which have been initiated on the basis of wrong information. The High Court also observed that grounds for reassemment in notice u/e 148A(b) and Order u/s 148A(d) are different.

Read the Orders at:

  1. CWP 18032 of 2022
  2. W.P 25635 of 2022
  3. W.P.A 19111 of 2022
  4. W.P(C) No. 11527 of 2022
  5. Writ Tax No. 723 of 2022
  6. MAT 917 of 2022
  7. W.P.(C) No. 7406 of 2022
  8. W.P(C) No. 113382022
  9. W.P(C) No. 11964 of 2022

Yuvraj is an advocate and has completed his B.A. LL.B(Hons) from RGNUL-Punjab. He is a practicing advocate and has been involved in matters pertaining to GST and other indirect taxes as well as Direct Tax. He is active in Writ Courts and has involvement in a few landmark judgments like Pitambra Books Pvt. Ltd. V. Union of India (W.P.C. No. 627 of 2020), and represented Sales Tax Bar Association (Delhi) to resolve GST issues and glitches.

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