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

The Allahabad HC addressed a jurisdictional dispute regarding reopening of assessment under Section 147/148 versus Section 153C following a search of Omaxe Group premises. The petitioner argued that Section 153A/153C should apply instead of Section 147/148 for search-based proceedings. The HC directed the Assessing Officer to consider and record findings on the jurisdictional error regarding proper invocation of sections while passing final orders, which remained pending at the time of judgment.

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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.

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