The Delhi High Court has quashed the income tax reassessment of completed assessment on the same facts.
The bench of Justice Yashwant Varma and Justice Ravinder Dudeja has observed that assessment proceedings had already concluded on 26.03.2022 and the reassessment action was reinitiated on the same set of reasons, leading to the passing of an order under Section 148-A(d) and issuance of notice under Section 148 of the Income Tax Act.
Background
The Petitioner/assessee is the proprietor of M/s. JMK Enterprises, which is engaged in dealing in electronic goods and components. Petitioner filed its return of income for the AY 2014-15 on 29.11.2014, declaring a total income of Rs. 23,05,560/-.
The department issued a notice under Section 148 proposing to assess/reassess the income of the petitioner. Petitioner filed his return of income in response to such notice along with copies of Trade and P&L Account and balance sheet of the Propitiatory Firm M/s. JMK Enterprises. After considering the submissions and the document placed on record by the petitioner, an Assessment Order under Section 147 came to be passed, accepting the submissions made by the petitioner.
On 31.05.2022, yet another notice under Section 148-A(b) purportedly in accordance with the judgment of the Supreme Court in Union of India v. Ashish Agarwal (2023) 1 SCC 617, came to be issued. Despite the fact that an order under Section 147 dated 26.03.2022 was already passed, respondent No. 1 passed an order under Section 148-A(d) on the same information which was the subject matter of the order passed under Section 147 dated 26.03.2022. Consequent to the aforesaid order, a notice under Section 148 of the Act came to be issued on 20.07.2022. Such order under Section 148-A(d) and the notice under Section 148 of the Act, both dated 20.07.2022, are subject matter of challenge in the present writ petition.
The petitioner has challenged order under Section 148-A(d) and notice under Section 148 of the Income Tax Act, 1961 by which, the income of the petitioner is sought to be reassessed on the ground that petitioner has not substantiated the source of cash and credit deposit during the Assessment Year 2014-15.
The principal challenge is to the initiation of reassessment in terms of a notice issued under Section 148 of the Act dated 20.07.2022 for the AY 2014-15.
ARGUMENTS – WHETHER SCN ALLEGING ESCAPED ASSESSMENT ISSUED WITHOUT ANY CHANGE IN FACTS AND FIGURES IS VOID OR VALID?
The department contended that the assessment proceedings completed on 26.03.2022 in pursuance of notice under Section 148 of the Act dated 31.03.2021 had become void ab initio because the notice under Section 148 in the case of the assessee for the AY 2014-15 was digitally signed on 31.03.2021. However, it was sent and delivered to the portal of the assessee on 03.04.2021 and therefore notice would be construed as a notice issued only on 03.04.2021 in terms of the judgement of the Supreme Court in the case of Suman Jeet Agarwal v. Income Tax Officer.
The department submitted that the decision in Ashish Agarwal’s case is applicable to all the notices under Section 148 issued during the period 01.04.2021 to 30.06.2022, treating them to be the notices under Section 148-A(b). Therefore, that being the reason, the assessment order arising out of the non-est notice under Section 148 would also be void and non-est.
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The assessee contended that the reassessment order and notice have been issued ignoring the fact that assessment order under Section 147 dated 26.03.2022 was already passed and that the judgment of the Supreme Court cannot be applied in the present case where proceedings have already culminated in an order passed under Section 147 on merits.
Conclusion
The court allowed the writ petition and quashed the order under Section 148-A(d) as well as consequential notice under Section 148.
Case Title: Jaswant Singh Juneja Versus ITO
Case No.: W.P.(C) 2062/2023
Date: 12/09/2024
Counsel For Petitioner: Gaurav Gupta
Counsel For Respondent: Sanjay Kumar
