Invalid notice under Income Tax Act leads to quashing of assessment - Writ of Certiorari granted The Division Bench held that the notice issued under section 148 of the Income Tax Act for AY 2012-13 was without jurisdiction as it failed to disclose ...
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Invalid notice under Income Tax Act leads to quashing of assessment - Writ of Certiorari granted
The Division Bench held that the notice issued under section 148 of the Income Tax Act for AY 2012-13 was without jurisdiction as it failed to disclose material facts necessary for assessment. The reasons for re-opening assessment were deemed impermissible, leading to the quashing of the notice and order. The petitioner's Writ of Certiorari under Article 226 was allowed, concluding the legal proceedings in favor of the petitioner with no order as to costs.
Issues: Impugning a notice under section 148 of the Income Tax Act, 1961 for AY 2012-13 and rejection of objections to the notice issuance.
Detailed Analysis: 1. The notice was issued after four years from the relevant assessment year, triggering the application of the proviso to section 147 of the Act. The onus is on the respondents to prove failure on the part of the petitioner to disclose all material facts necessary for assessment. 2. The reasons recorded for re-opening failed to disclose the material fact petitioner allegedly failed to disclose. The Assessing Officer must have reasons to believe income has escaped assessment due to omission or failure by the assessee to disclose all material facts. 3. A Division Bench held that the power to reopen an assessment is restricted by the proviso to section 147, limiting the time period to four years unless there is a failure to disclose material facts. The jurisdictional facts under section 147 must exist before issuing a notice under section 148. 4. The reasons for re-opening assessment cited irregular deduction claimed by the assessee, indicating a change of opinion, which is impermissible. The notice was deemed to be issued without jurisdiction and set aside along with the impugned order. 5. The petition was allowed, quashing the notice and order, citing lack of jurisdiction. The petitioner sought a Writ of Certiorari under Article 226 of the Constitution of India to set aside the notice and order. 6. The petition was disposed of with no order as to costs, concluding the legal proceedings in favor of the petitioner.
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