2023 (7) TMI 1166 - HC - Income Tax

Notices Under Section 148A(b) & Orders Under 148A(d) Unsustainable Due to Non-Compliance, Court Rules

The court set aside the notices under Section 148A(b) and orders under Section 148A(d) of the Act, declaring them unsustainable due to non-compliance with ... Reopening of assessment - legality of notice u/s 148A(b) and orders u/s 148A(d) - Scope of new provision section 148A - conducting of enquiries or issuance of show-cause notice or passing of order under section 148A - Scope of amendment by the Finance Act, 2021 as amended Income Tax Act by introducing new provisions i.e. sections 147 to 151 w.e.f. 1st April, 2021 - HELD THAT:- As noticed that notices cannot be issued in a case for AY 2013-14, AY 2014-15 and AY 2015-16 if the income escaping assessment, in that case for that year, amounts to or is likely to amount to less than fifty lakh rupees. Hence, in order to reduce the compliance burden of assessees, it is clarified that information and material may not be provided in a case for AY 2013-14, AY 2014-15 and AY 2015-16, if the income escaping assessment, in that case for that year, amounts to or is likely to amount to less than fifty lakh rupees. Separate instruction shall be issued regarding procedure for disposing these cases. Procedure required to be followed by the Assessing Officers to comply with the Supreme Court judgment in Union of India vs Ashish Aggarwal [2022 (5) TMI 240 - SUPREME COURT] The impugned notices under Section 148A(b) of the Act, having been mailed after 03.06.2022, do not just abrogate the mandate of the CBDT instructions quoted above but also violate the provisions of Section 282A of the Act insofar as the name and designation of the concerned officer issuing the same find no mention in the same. That being so, the notices under Section 148A(b) of the Act impugned in these writ petitions cannot be sustained. In the case of LSR Medical Pvt. Ltd.[2023 (4) TMI 1231 - DELHI HIGH COURT] this court to which one of us was a member allowed the writ petition on similar grounds. The notices u/s 148A(b) and orders u/s 148A(d) of the Act, impugned in these writ petitions are set aside and the petitions are allowed Issues:The judgment involves the legality of notices under Section 148A(b) of the Act and orders under Section 148A(d) of the Act, focusing on the time limits and compliance with CBDT instructions.Issue 1 - Legality of Notices and Orders:The petitioners challenged the notices dated 02.06.2022 under Section 148A(b) of the Act, arguing that they lost efficacy after 03.06.2022, rendering the subsequent orders under Section 148A(d) of the Act invalid.Issue 2 - Compliance with CBDT Instructions:The judgment referred to Instruction No. 1/2022 issued by the CBDT after the Supreme Court's ruling in Union of India vs Ashish Aggarwal. The instructions clarified the procedure for providing information and material to assessees within specified time limits.Judgment Details:The judgment highlighted that the impugned notices under Section 148A(b) of the Act, mailed after 03.06.2022, contravened both the CBDT instructions and Section 282A of the Act by lacking details of the issuing officer. Consequently, the notices in question were deemed unsustainable.In a related case, LSR Medical Pvt. Ltd. vs DCIT Circle 13(1) & Anr, a co-ordinate bench of the court allowed a writ petition based on similar grounds, further supporting the decision in the present case.Therefore, the judgment set aside the notices under Section 148A(b) of the Act and orders under Section 148A(d) of the Act, granting liberty to the revenue to proceed lawfully. Subsequently, the pending applications were also disposed of in light of the decision.