Reassessment notice under Section 148A quashed after officer failed to verify taxpayer had filed return

Bombay HC quashed reassessment notice u/s 148A(b) and order u/s 148A(d) where AO alleged petitioner was non-filer for not submitting income return. Court found petitioner had actually filed return, paid taxes, and claimed refund, with return already processed under s.143(1). HC held AO failed to verify basic facts before issuing notice despite having PAN number, making proceedings unjustified. Decision favored assessee.

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Issues involved:
The issues involved in the judgment are related to the notice issued under Section 148A(b) of the Income Tax Act, 1961 alleging that income chargeable to tax for Assessment Year 2019-2020 has escaped assessment, and the subsequent order passed under Section 148A(d) rejecting the objections raised by the Petitioner.

Details of the Judgment:

1. Notice under Section 148A(b) of the Act:
The Petitioner, an individual assessed to income from various sources, received a notice dated 31st March 2023 under Section 148A(b) alleging that income chargeable to tax for Assessment Year 2019-2020 had escaped assessment. The basis for re-opening was the Petitioner's failure to file a return of income despite having a significant salary and purchase of securities.

2. Response to Notice:
The Petitioner responded to the notice by stating that the Income Tax Return for the relevant year had indeed been filed, and the return was attached for reference. However, the subsequent order passed under Section 148A(d) on 26th April 2023 rejected the objections raised by the Petitioner.

3. Judicial Review:
The High Court found the order under Section 148A(d) unsustainable as the notice did not call upon the Petitioner to provide justification on the transactions in question. The Petitioner had filed the Return of Income, paid the total tax, and claimed a refund, rendering the order and notice invalid.

4. Verification Requirement:
The Court highlighted that the Assessing Officer was obligated to verify information before issuing a notice under Section 148A(b). Guidelines emphasized the need for proper verification and an opportunity for the assessee to be heard before initiating proceedings under Section 148/147 of the Act.

5. Court's Decision:
The Court quashed and set aside the impugned order under Section 148A(d) and the notice issued under Section 148A(b) of the Act. The Petition was disposed in favor of the Petitioner, calling for the records to be examined for legality and validity, ultimately canceling the impugned notices and orders issued by the Respondents.

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