2025 (3) TMI 1596 - HC - Income Tax

Validity of reopening of assessment under Section 148A: order set aside and matter remanded for fresh AO consideration within timelines

Reopening of assessment was set aside and remitted for fresh consideration because the notice process under the provisional reopening procedure was not ... Validity of reopening of assessment - notice issued under Section 148A(b) - HELD THAT:- We consider it apposite to set aside the impugned order passed u/s 148A(d) of the Act and remand the matter to the AO for considering afresh. The petitioner is at liberty to respond to the notice dated 20.03.2024 issued u/s 148A(b) of the Act in respect of Assessment Year [AY] 2020-21 within a period of ten days from date. The AO shall consider the response of the petitioner and pass a fresh order within a period of four weeks thereafter. Issues: (i) Whether the impugned order dated 30.03.2024 passed under Section 148A(d) of the Income-tax Act, 1961 should be set aside and the matter remitted to the Assessing Officer for fresh consideration; (ii) Whether the notice issued under Section 148 of the Income-tax Act, 1961 pursuant to the impugned order and further consequential proceedings should be set aside.Issue (i): Whether the impugned order dated 30.03.2024 passed under Section 148A(d) of the Income-tax Act, 1961 should be set aside and the matter remitted to the Assessing Officer for fresh consideration.Analysis: The Court examined the procedural posture in which the Revenue sought further time and, on instructions, agreed that the order dated 30.03.2024 be set aside and the matter remanded for fresh consideration. The Court did not decide the merits of the underlying tax dispute but directed that the petitioner be given an opportunity to respond to the Section 148A(b) notice and that the Assessing Officer consider the response and pass a fresh order within a specified time frame. The AO was also permitted to seek additional information or documents if required.Conclusion: The impugned order dated 30.03.2024 under Section 148A(d) is set aside and the matter is remitted to the Assessing Officer for fresh decision after permitting the petitioner to respond.Issue (ii): Whether the notice issued under Section 148 of the Income-tax Act, 1961 pursuant to the impugned order and further consequential proceedings should be set aside.Analysis: As a consequence of setting aside the Section 148A(d) order and remitting the matter for fresh consideration, the Court addressed the validity of the Section 148 notice that had followed from that order. The Court recorded that, in view of the remand and the vacatur of the impugned order, the Section 148 notice and any further proceedings pursuant thereto could not stand and were set aside.Conclusion: The notice issued under Section 148 and any further proceedings pursuant to the impugned order are set aside.Final Conclusion: The petition is disposed of by setting aside the impugned Section 148A(d) order, remitting the matter to the Assessing Officer for fresh, time-bound consideration after permitting the petitioner to respond, and by setting aside the Section 148 notice and consequential proceedings.Ratio Decidendi: Where a statutory order under Section 148A(d) is vacated and the Revenue invites fresh consideration, the appropriate remedy is to set aside that order and remit the matter to the Assessing Officer to decide afresh in a time-bound manner after affording the assessee an opportunity to respond.