Case Note & Summary
The petitioner, Godrej Industries Ltd., challenged a show cause notice dated 24th May 2022 under Section 148A(b), an order dated 31st July 2022 under Section 148A(d), and a notice dated 31st July 2022 under Section 148 of the Income Tax Act, 1961, issued by the Assistant Commissioner of Income Tax, Circle 14(1)(2), Mumbai. The petitioner contended that these actions were without jurisdiction as they failed to comply with the jurisdictional pre-conditions under Sections 147, 148, 148A, 149, and 151 of the Act. The grounds raised included that the impugned notice was issued beyond the limitation period under Section 149, there was no 'information' as per Explanation 1 to Section 148, the notice was issued during the pendency of earlier reassessment proceedings from a notice dated 21st May 2021, there was no income chargeable to tax represented by an asset that had escaped assessment to invoke the extended limitation under Section 149(1)(b), and the Assessing Officer had no power to review his own assessment based on the same information already considered. The court analyzed these submissions and found merit in the petitioner's arguments, particularly noting that the reassessment notice was time-barred and lacked fresh information. The court quashed the impugned show cause notice, order, and notice, allowing the writ petition.
Headnote
A) Income Tax - Reassessment - Limitation - Section 149 Income Tax Act, 1961 - The impugned notice was issued beyond the period of limitation provided in Section 149, rendering it bad in law. (Paras 1-2)
B) Income Tax - Reassessment - Information - Explanation 1 to Section 148 Income Tax Act, 1961 - There existed no 'information' as understood under Explanation 1 to Section 148, as the same information was already considered during original assessment. (Paras 2, 5)
C) Income Tax - Reassessment - Pendency of Earlier Proceedings - The impugned notice was issued during pendency of reassessment proceedings pursuant to an earlier Section 148 notice dated 21st May 2021, and the directions in Union of India v. Ashish Agarwal were not applicable as no writ petition was filed challenging that notice. (Paras 2, 5)
D) Income Tax - Reassessment - Asset Escaped Assessment - Section 149(1)(b) Income Tax Act, 1961 - There was no income chargeable to tax represented in the form of an asset which had escaped assessment, hence the extended period of limitation under Section 149(1)(b) could not apply. (Paras 2, 5)
E) Income Tax - Reassessment - Review - The Assessing Officer had no power to review his own assessment when the same information was provided and considered during the original assessment. (Paras 2, 5)
Issue of Consideration
Whether the impugned show cause notice, order, and notice under Sections 148A(b), 148A(d), and 148 of the Income Tax Act, 1961 are without jurisdiction for non-compliance with jurisdictional pre-conditions under Sections 147, 148, 148A, 149, and 151 of the Act.
Final Decision
The court allowed the writ petition and quashed the show cause notice dated 24th May 2022 under Section 148A(b), the order dated 31st July 2022 under Section 148A(d), and the notice dated 31st July 2022 under Section 148 of the Income Tax Act, 1961.
Law Points
- Reassessment notice beyond limitation period
- no fresh information as per Explanation 1 to Section 148
- pendency of earlier reassessment proceedings
- no income chargeable to tax represented by asset escaped assessment
- no power to review own assessment
Case Details
2024 LawText (BOM) (02) 231
Writ Petition No.450 of 2023
K. R. Shriram, Dr. Neela Gokhale
Mr. P.J. Pardiwalla, Senior Advocate a/w. Mr. Jeet Kamdar i/b. Mr. Atul K. Jasani for petitioner; Mr. Suresh Kumar for respondents
The Assistant Commissioner of Income Tax, Circle 14(1)(2), Mumbai; The Principal Chief Commissioner of Income Tax, Mumbai; National Faceless Assessment Centre, New Delhi; Union of India
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Nature of Litigation
Writ petition challenging reassessment proceedings under Income Tax Act, 1961
Remedy Sought
Quashing of show cause notice dated 24th May 2022 under Section 148A(b), order dated 31st July 2022 under Section 148A(d), and notice dated 31st July 2022 under Section 148 of the Income Tax Act, 1961
Filing Reason
Impugned notices and order were without jurisdiction, issued beyond limitation, without fresh information, during pendency of earlier reassessment, and without power to review
Previous Decisions
Earlier reassessment notice dated 21st May 2021 under Section 148 was issued; no writ petition was filed challenging that notice
Issues
Whether the impugned notice under Section 148A(b) and subsequent order and notice under Sections 148A(d) and 148 were issued beyond the period of limitation under Section 149?
Whether there existed any 'information' as per Explanation 1 to Section 148 to justify reassessment?
Whether the impugned notice was issued during pendency of earlier reassessment proceedings and thus illegal?
Whether there was any income chargeable to tax represented by an asset which had escaped assessment to invoke extended limitation under Section 149(1)(b)?
Whether the Assessing Officer had power to review his own assessment based on same information already considered?
Submissions/Arguments
Petitioner argued that the impugned notice was issued beyond the period of limitation under Section 149 and hence bad in law.
Petitioner argued that there was no 'information' as understood under Explanation 1 to Section 148.
Petitioner argued that the impugned notice was issued during pendency of earlier reassessment proceedings and the directions in Union of India v. Ashish Agarwal were not applicable.
Petitioner argued that there was no income chargeable to tax represented by an asset which had escaped assessment, so extended limitation under Section 149(1)(b) could not apply.
Petitioner argued that the Assessing Officer had no power to review his own assessment when the same information was already considered during original assessment.
Ratio Decidendi
A reassessment notice issued beyond the limitation period under Section 149 and without fresh information as per Explanation 1 to Section 148 is without jurisdiction and liable to be quashed. The Assessing Officer cannot review his own assessment based on the same information already considered during original assessment.
Judgment Excerpts
This petition challenges show cause notice dated 24th May 2022 issued under Section 148A(b) of the Income Tax Act, 1961 (the Act), order dated 31st July 2022 passed under Section 148A(d) of the Act (the impugned order) and notice dated 31st July 2022 issued under Section 148 of the Act (the impugned notice).
According to petitioner the same are without jurisdiction inasmuch as they have been issued without complying with the jurisdictional pre-conditions referred to in Sections 147, 148, 148A, 149 and 151 of the Act.
Procedural History
The petitioner filed Writ Petition No.450 of 2023 before the Bombay High Court challenging the show cause notice dated 24th May 2022 under Section 148A(b), order dated 31st July 2022 under Section 148A(d), and notice dated 31st July 2022 under Section 148 of the Income Tax Act, 1961. The petition was reserved on 12th February 2024 and pronounced on 28th February 2024.
Acts & Sections
- Income Tax Act, 1961: 147, 148, 148A, 149, 151
