Notices under s.147/148 and order under s.148A(d) quashed for relying on incorrect non-filer premise despite ITR and s.143(1) intimation

HC set aside the notices issued under s.147/148 and the order passed under s.148A(d), finding the AO proceeded on an incorrect premise that the taxpayer was a non-filer despite filing an ITR and receiving intimation under s.143(1). The HC observed the purported email evidence was neither dated in the order nor clearly established the amount alleged, and that limitation for AY 2016-17 remained extended; consequently the impugned notices and order were quashed.

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Issues:
Challenge to notice under Section 148A(b) of the Income Tax Act, 1961; Challenge to order under Section 148A(d) and consequential notice for Assessment Year 2016-17.

Analysis:
The High Court addressed a writ petition challenging a notice under Section 148A(b) of the Income Tax Act, 1961, and an order under Section 148A(d) along with a consequential notice for Assessment Year 2016-17. The Assessing Officer (AO) issued the initial notice based on the premise that the petitioner had not filed the return for the relevant year. The petitioner responded seeking more time due to health issues and ongoing litigation. Subsequently, the AO issued a fresh notice with a shorter deadline. The AO passed an order under Section 148A(d) noting that the petitioner had indeed filed the return but raised new issues not mentioned in the initial notice, involving undisclosed income from a property sale. The petitioner argued that the initial notice was based on incorrect information as the return had been filed and income details were disclosed. The Court found discrepancies in the AO's actions and the lack of clarity in the information provided, leading to the setting aside of the notices and order.

The Court noted that the AO's possession of an email regarding the property sale was not mentioned in the initial notice, raising questions about transparency and procedural fairness. The Court expressed confusion over the AO's use of the term "at least" regarding the undisclosed income, emphasizing the need for clarity and precision in such matters. The Court ultimately decided to set aside the impugned notices and order due to the lack of proper communication and procedural irregularities.

Regarding the limitation period, the Court clarified the understanding of the relevant provisions of the Act, highlighting discrepancies in the AO's calculation of the limitation period. The Court granted liberty to the AO to take further legal steps but emphasized the importance of providing all relevant information, particularly the email from the property buyer, if reassessment proceedings were to be recommenced. The writ petition was disposed of with parties instructed to act based on the digitally signed copy of the order.

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