Reassessment orders under Section 148A(d) invalid when reasons differ from original Section 148A(b) notices

HC held that reassessment orders u/s 148A(d) were invalid where reasons differed from those stated in notices u/s 148A(b). The original notices proposed taxing receipts under capital gains provisions, but orders invoked Section 56(2)(x)(a) for the first time. Court emphasized that Section 148A(b) notices serve mandatory purpose of informing assessees of grounds for reassessment, not mere formality. Different reasons in orders versus notices would defeat this purpose. Court treated impugned orders as fresh notices u/s 148A(b), directing appellants to file objections within six weeks, with revenue to decide within six weeks thereafter after providing hearing opportunity.

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Issues Involved:
1. Prematurity of Writ Petitions challenging orders u/s 148A(d).
2. Difference in reasons between notices u/s 148A(b) and orders u/s 148A(d).
3. Taxability of the buyout amount and interest on short-term fixed deposit.

Summary:

1. Prematurity of Writ Petitions challenging orders u/s 148A(d):
The appellants challenged the orders u/s 148A(d) and consequential notices u/s 148 on the grounds that the writ petitions were premature. The court held that the legal issues arising for consideration in the assessment should be decided by the assessing authority after detailed consideration of the appellants' arguments. The learned Judge rejected the writ petitions, stating that the assessing officer's prima facie conclusion of income escapement was not untoward and that the matter was premature at this juncture.

2. Difference in reasons between notices u/s 148A(b) and orders u/s 148A(d):
The appellants contended that the reasons set out in the orders u/s 148A(d) were different from those in the notices u/s 148A(b), thereby denying them an opportunity to respond. The court emphasized that the object behind issuing a notice u/s 148A(b) is to put the assessee on notice of the reasons for issuing a notice u/s 148. It is essential to disclose the reasons to enable the noticee to respond. The court referred to the Supreme Court's judgment in Union of India v. Ashish Agarwal, highlighting that the procedure under Section 148A is a mandatory requirement and not an empty formality.

3. Taxability of the buyout amount and interest on short-term fixed deposit:
The impugned proceedings revolved around the liability of monies paid to the appellants pursuant to the buyout of shares in SVGML. The court noted that the Supreme Court had directed a sum of Rs. 100 crores to be paid to the appellants for the buyout of their shares, and the appellants had received Rs. 18,62,03,348/-. The assessing authority's view was that the receipt should not be treated as exempt under the Income Tax Act, and interest on the short-term fixed deposit should be taxed in the assessment year 2019-20. The court directed that the impugned orders u/s 148A(d) be treated as notices u/s 148A(b), and the appellants were given six weeks to file their objections, which should be considered on merits and in accordance with law.

Conclusion:
The court disposed of all the writ appeals, directing the appellants to file their objections within six weeks and the assessing authority to consider these objections and pass orders on merits within six weeks, providing an opportunity of hearing to the appellants. No costs were imposed, and connected miscellaneous petitions were closed.

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