2024 (5) TMI 448 - HC - Income Tax

Assessing Officer must record findings on jurisdictional error between Section 147/148 versus Section 153C in search proceedings

Smt. Neelam Dubey Versus Union Of India Thru. Its Secy. (Revenue) Ministry Of Finance, Govt. Of India, New Delhi And Others

The Allahabad HC addressed a jurisdictional dispute regarding reopening of assessment under Section 147/148 versus Section 153C following a search of ... Reopening of assessment u/s 147 or u/s 153C - as argued in case of search of premises/offices of Omaxe Group, some papers have been discovered by the authorities then Section 153 A and 153 C would apply and not Section 147 and 148 - It is the case of the respondent no.2 that information received on the basis of search initiated under Section 132 also includes a search on any other person and Section 148(A) requires a show-cause notice to be issued which has been issued under sub-clause (b) thereof to the petitioner and then the impugned order has been passed under sub-clause (d) of Section 148(A). HELD THAT:- As per respondents that all information that is received by the AO shall be provided and has been provided to the Assessee to enable her to make her detailed reply/ objection to such notices and the Assessment has not been completed as yet and, therefore, the writ petition has been filed only on the misapprehension. This Court having considered the arguments raised by the learned counsel for the petitioner and that of the respondent no.2 is of the opinion that the question of jurisdictional error that has been pointed out with regard to invoking Section 147, 148 and 148A and not Section 153C should also be considered by the Assessing Officer and a finding be recorded thereon while passing final orders, which till date have not been passed. Issues:The issues involved in this case are the challenge to the notice issued under Section 148A(b) of the Income Tax Act for the Assessment Year 2017-2018, the order passed for Assessment Year 2017-2018 under Section 148A(d) of the Act, and the consequential notice issued for re-assessment for the same year. The petitioner seeks a writ to quash the impugned notices and to prevent harassment by the respondents.Notice under Section 148A(b):The petitioner challenged the notice issued under Section 148A(b) of the Income Tax Act for the Assessment Year 2017-2018. The petitioner's husband, a retired government employee, invested in Omaxe Infrastructure Scheme through banking channels. After his death, the amount was transferred to the petitioner, who then invested it in Omaxe Avenue Scheme. The petitioner invested only Rs. 41 lakhs, but the Income Tax Department alleged unaccounted cash transactions of Rs. 4,10,00,000, leading to a notice for re-assessment under Section 147.Simultaneous Notices for Re-assessment:The petitioner received simultaneous notices for re-assessment for the Assessment Years 2017-18 and 2019-20, both relating to alleged cash transactions of Rs. 4,10,00,000. The petitioner challenged these notices, arguing that only one notice should be issued for one Assessment Year at a time for the same amount. The petitioner also contested a penalty notice issued without a final assessment order.Jurisdictional Error and Procedure:The petitioner argued that Section 153(C) should have been invoked instead of Section 147 for re-assessment based on information from the search operations on Omaxe Group. Section 153(C) allows for assessing or reassessing income of a person based on information found during search operations on another person. The petitioner contended that following Section 153(C) would have provided clearer information from the Assessing Officer.Legal Observations and Disposal:The court noted the jurisdictional error raised by the petitioner and directed the Assessing Officer to consider this issue while passing final orders. The court disposed of the writ petition with these observations, emphasizing the need for proper consideration of jurisdictional aspects in the assessment process.