Tax Notices Quashed: Court Finds No New Substantial Evidence for Reassessment, Allows Potential Fresh Proceedings.

The HC quashed the impugned notices issued under sections 148A(b) and 148 of the Income Tax Act, 1961, for AY 2017-18, citing lack of jurisdiction and absence of new substantial evidence. The Court allowed the Revenue the liberty to initiate fresh reassessment proceedings if legally justified, maintaining the rights and contentions of both parties for any future actions. The writ petition was disposed of with these considerations.

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Issues involved:
The petition seeks to quash notices u/s 148A (b) and 148, and order u/s 148A (d) of the Income Tax Act, 1961 for AY 2017-18.

Details of the Judgment:

1. The petitioner, engaged in wholesale trading, filed an Income Tax Return (ITR) for AY 2017-18 declaring income. The ITR was scrutinized for capital gains/loss and cash deposits during demonetization.

2. The Revenue issued notices seeking verification of cash deposits and confirmation from a supplier. An assessment order was passed accepting the ITR.

3. A notice u/s 148 was issued to reopen assessment, but it was quashed based on legal precedents. Subsequently, a Supreme Court decision clarified treatment of notices issued between specific dates.

4. The Revenue issued a fresh notice u/s 148A (b) alleging an increase in sales turnover, leading to a reassessment order u/s 148A (d).

5. Petitioner argued lack of jurisdiction in reassessment proceedings, citing absence of new substantial evidence and improper authority issuing the notice.

6. The Court found the challenge concluded based on a previous judgment, quashing the impugned notices and order, with liberty reserved for the Revenue to initiate reassessment proceedings afresh if required by law.

7. The writ petition was disposed of accordingly, with rights and contentions of both parties remaining open for any future reassessment proceedings.

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