Reassessment notices on Income Disclosure Scheme income in Form-4: reopening u/s148 held impermissible; notices quashed.

The dominant issue was whether reassessment could be validly initiated under s.148 on the basis of information concerning income already disclosed under the Income Disclosure Scheme and reflected in Form-4. The HC held that once the income stood voluntarily declared under the statutory scheme and Form-4 was issued, the premise of "income escaping assessment" ceased to exist; reopening on that very material lacked jurisdictional foundation and was impermissible in law. Consequently, the impugned notices issued under s.148 for reopening were quashed.

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Issues involved: Availing income declaration scheme 2016, non-credit of amounts paid, correction of head of challan credit, challenge to reopening notice u/s 148.

The judgment addressed the issue of the petitioner availing the income declaration scheme 2016 and facing challenges regarding the credit for amounts paid to the department for specific assessment years. The petitioner claimed to have made payments through self-assessment tax and TDS, but credit for these amounts was not being recognized, leading to the petitioner being declared a defaulter under the scheme. The court noted the importance of correcting the head of challan credit to resolve the matter effectively. The respondents were directed to make the necessary correction by a specified date to facilitate the closure of the IDS file and subsequent proceedings, including the reopening notice. The petitioner was granted leave to amend the petition, with corresponding rights and contentions of the respondents being kept open. The case was adjourned for further proceedings.

Regarding the challenge to the reopening notice under section 148 of the Income Tax Act, the petitioner contested the notice based on the disclosure of unaccounted income under the IDS. The reopening was initiated due to alleged default in tax payment despite the income declaration. The petitioner argued that since Form-4 had been issued under the IDS, there was no escapement of income as claimed in the information leading to the reopening. The court agreed with the petitioner's submissions and granted relief by declaring the impugned reopening notices and subsequent orders as without jurisdiction, illegal, and arbitrary. A writ of certiorari was issued to quash the reopening notices and related orders, thereby disposing of the petition.

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