Court grants interim stay on Income Tax Act Section 148 notice for 2012-13 assessment lacking jurisdiction.

The Court granted an interim stay on a notice issued under Section 148 of the Income Tax Act, 1961 to reopen the assessment for Assessment Year 2012-13. The Court found that the notice lacked jurisdiction as there was no valid reason to believe that income had escaped assessment. The petitioner successfully argued that the notice was based on incorrect information and indicated a possible change of opinion by the Assessing Officer. Consequently, the Court ordered a stay on the notice until the final disposal of the petition.

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Issues:
Challenge to notice under Section 148 of the Income Tax Act, 1961 seeking to reopen assessment for Assessment Year 2012-13.

Analysis:
The petition challenges a notice dated 20th March, 2019, issued under Section 148 of the Income Tax Act, 1961, seeking to reopen the assessment for Assessment Year 2012-13. The petitioner argues that the notice is beyond the 4-year period from the end of the relevant assessment year, as the assessment was already completed under Section 143(3) of the Act. The petitioner asserts that there was no failure on its part to disclose all material facts necessary for assessment. However, the respondent contends that fresh tangible material was received by the Assessing Officer, specifically an order of the Commissioner of Income Tax (Appeals) in relation to group companies. The petitioner highlights that the notice proceeds on the incorrect basis that the consideration received for the sale of shares was Nil, whereas they had actually sold them at market value on the stock exchange, a fact that was examined during regular assessment proceedings leading to an order under Section 143(3) of the Act. The respondents have not disputed this fact.

The Court finds that a prima facie case has been made out by the petitioner indicating non-application of mind to the facts in issuing the impugned notice and a possible change of opinion. Consequently, the Assessing Officer lacked any reason to believe that income chargeable to tax had escaped assessment, rendering the notice prima facie without jurisdiction. Therefore, the Court orders an interim stay of the impugned notice dated 20th March, 2019, until the final disposal of the petition.

The respondent's counsel waives service, indicating their acceptance of the proceedings without the need for formal service.

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