Court accepts notice for respondents 2 & 3, proceedings paused. Legal complexities in assessment, jurisdiction, time-barred actions

The court accepted the notice on behalf of respondents No. 2 and 3, waiving service, and ordered proceedings to be kept in abeyance until further orders, with a notice of motion returnable for 13.12.2022. The judgment underscores legal complexities surrounding assessment proceedings, with the petitioner's arguments focusing on jurisdiction and the time-barred nature of the department's actions. The challenge to the notice dated 13.04.2021 for the assessment year 2013-2014, treatment under Section 148-A, and reliance on CBDT instructions dated 11.05.2022 were key points of contention.

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Issues:
Challenge to notice dated 13.04.2021 for assessment year 2013-2014; treatment of notice under Clause (b) of Section 148-A; order dated 28.07.2022 under Section 148-A(d) of the Income Tax Act 1961; time-barred proceedings under Section 149; challenge to CBDT instructions dated 11.05.2022.

Analysis:
The petitioner challenges the notice dated 13.04.2021 for the assessment year 2013-2014, along with subsequent proceedings, including the notice dated 17.05.2022 treating the earlier notice under Clause (b) of Section 148-A and the order dated 28.07.2022 passed under Section 148-A(d) of the Income Tax Act 1961. The petitioner argues that as per the Supreme Court's ruling in Union of India & others Vs. Ashish Agarwal, all defenses, including those under Section 149 of the Act, are available to the assessee even if the notice under Section 148 is treated as under Section 148-A.

The main contention revolves around the time-barred nature of the proceedings for the assessment year 2013-2014. The petitioner asserts that the proceedings are time-barred under the proviso to Section 149 of the Income Tax Act. The proviso states that no notice under Section 148 shall be issued if it could not have been issued due to exceeding the time limit specified under the provisions of Sub Section (1) (b) of the Section. Since more than six years had elapsed from the end of the assessment year 2013-2014 on 31.03.2020, the re-assessment notice could not be issued as per the amended proviso to Section 149.

Furthermore, the petitioner vehemently argues that the initiation of proceedings by issuing a notice under Section 148 A (d) for the assessment year 2013-2014 is without jurisdiction and is time-barred. The petitioner also challenges the department's reliance on CBDT instructions dated 11.05.2022, contending that they go against the Supreme Court's ruling in Ashish Agarwal and are misleading. A challenge to the circular dated 11.05.2022 at Annexure P-7 has been raised in the petition, indicating a discrepancy between the department's actions and the legal precedent set by the apex court.

The court has accepted the notice on behalf of respondents No. 2 and 3 and waived service. The proceedings in the matter are to be kept in abeyance until further orders, with a notice of motion returnable for 13.12.2022. The comprehensive analysis of the issues involved in the judgment highlights the legal complexities surrounding the assessment proceedings and the petitioner's strong arguments regarding the jurisdiction and time-barred nature of the actions taken by the department.

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