Case Note & Summary
The petitioner, an individual, filed a return of income for Assessment Year 2018-19 on 28 August 2018 declaring total income of Rs.26,26,220/-. Subsequently, the petitioner received a notice dated 28 September 2019 under Section 143(2) of the Income Tax Act, 1961 stating that the return was selected for limited scrutiny regarding investments in immovable property and capital gains. Later, the petitioner received a notice dated 12 December 2019 under Section 148 of the Act for reassessment. The petitioner challenged the reassessment notice by way of a writ petition before the Bombay High Court. The court examined whether the notice under Section 148 was valid. The court noted that the notice was issued beyond the time limit prescribed under Section 149 of the Act. Additionally, the court found that the Assessing Officer failed to record proper reasons for reopening the assessment and did not obtain the mandatory sanction under Section 151 of the Act. The court held that the reassessment notice was illegal and without jurisdiction. Consequently, the court allowed the writ petition and quashed the notice under Section 148. The court also made the rule absolute and directed the respondents to act accordingly.
Headnote
A) Income Tax - Reassessment - Section 148 - Time Limit - Notice issued under Section 148 of the Income Tax Act, 1961 for reassessment must be issued within the time limit prescribed under Section 149. In this case, the notice was issued beyond the permissible period, rendering it invalid. (Paras 1-8) B) Income Tax - Reassessment - Section 151 - Sanction - Prior approval of the specified authority under Section 151 is mandatory before issuing a notice under Section 148. The court found that the sanction was not properly obtained, vitiating the reassessment proceedings. (Paras 1-8) C) Income Tax - Reassessment - Recording of Reasons - The Assessing Officer must record reasons for reopening an assessment. Failure to do so makes the notice under Section 148 unsustainable. (Paras 1-8)
Issue of Consideration
Whether the reassessment notice issued under Section 148 of the Income Tax Act, 1961 was valid when issued beyond the time limit and without proper sanction under Section 151?
Final Decision
The court allowed the writ petition and quashed the notice dated 12 December 2019 issued under Section 148 of the Income Tax Act, 1961. Rule made absolute.
Law Points
- Reassessment notice under Section 148 must be issued within prescribed time limit
- Proper sanction under Section 151 is mandatory
- Failure to record reasons invalidates notice
- Writ jurisdiction under Article 226 available against illegal reassessment
