Case Note & Summary
The petitioner, Godrej Industries Ltd., challenged a show cause notice dated 24th May 2022 issued under Section 148A(b) of the Income Tax Act, 1961, an order dated 31st July 2022 under Section 148A(d), and a notice dated 31st July 2022 under Section 148 of the Act. 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 key facts are that the impugned notice was issued beyond the period of limitation provided in Section 149, there was no 'information' as defined in Explanation 1 to Section 148, the notice was issued during the pendency of earlier reassessment proceedings under a notice dated 21st May 2021, there was no income chargeable to tax represented by an asset that had escaped assessment, and the Assessing Officer had no power to review his own assessment when the same information was already considered during the original assessment. The court analyzed the grounds raised by the petitioner and found merit in them. The court held that the impugned notice was issued beyond the three-year limitation period under Section 149(1)(a) and that the extended period under Section 149(1)(b) was not applicable. The court also held that the information relied upon was not new and had been considered in the original assessment, and that the earlier notice under Section 148 could not be deemed as a notice under Section 148A(b) as per the Supreme Court's judgment in Union of India v. Ashish Agarwal since no writ petition was filed by the petitioner. Consequently, the court quashed the impugned show cause notice, order, and notice under Section 148.
Headnote
A) Income Tax - Reassessment - Limitation - Section 149 of Income Tax Act, 1961 - Notice issued beyond period of limitation - Held that the impugned notice under Section 148A(b) was issued beyond the three-year limitation period provided under Section 149(1)(a) and hence invalid (Paras 1-2). B) Income Tax - Reassessment - Information - Explanation 1 to Section 148 of Income Tax Act, 1961 - No valid 'information' existed - Held that the information relied upon was already considered during original assessment and did not constitute new information as required (Paras 2-3). C) Income Tax - Reassessment - Pendency of earlier proceedings - Section 148 of Income Tax Act, 1961 - Notice issued during pendency of earlier reassessment - Held that the earlier notice under Section 148 dated 21st May 2021 could not be deemed as notice under Section 148A(b) as per Ashish Agarwal judgment since no writ was filed (Paras 2-3). D) Income Tax - Reassessment - Income escaping assessment - Section 149(1)(b) of Income Tax Act, 1961 - No income represented by asset escaping assessment - Held that extended limitation period under Section 149(1)(b) not applicable (Paras 2-3). E) Income Tax - Reassessment - Power to review - Section 147 of Income Tax Act, 1961 - Assessing Officer cannot review own assessment - Held that respondent no.1 had no power to review when same information was already considered (Paras 2-3).
Issue of Consideration
Whether the show cause notice under Section 148A(b), order under Section 148A(d), and notice under Section 148 of the Income Tax Act, 1961 are valid and within jurisdiction.
Final Decision
The court 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
- Limitation period for reassessment
- Information as per Explanation 1 to Section 148
- Pendency of earlier reassessment proceedings
- Income chargeable to tax escaping assessment
- Power to review own assessment
