Case Note & Summary
The petitioner, Pierlite India Private Limited, a company incorporated under the Companies Act, 1956, engaged in manufacturing low voltage switchgear and lighting solutions, filed its return of income for Assessment Year 2016-17 in November 2016 declaring nil income, with tax liability determined under Section 115JB of the Income Tax Act, 1961. The case was selected for scrutiny assessment, and the Assessing Officer issued a notice under Section 142(1) calling for details. The petitioner furnished all necessary material, including Tax Audit Reports and computation of income. However, the Assessing Officer framed the assessment. Subsequently, the respondent issued an order under Section 148A(d) and a notice under Section 148 dated 24.03.2023 for the same assessment year. The petitioner challenged these before the Gujarat High Court under Article 226 of the Constitution of India. The court had earlier admitted the petition on the ground of jurisdiction of the Assessing Officer versus the Faceless Assessing Officer, but vide order dated 17.09.2025, that issue was concluded, and the matter was kept for consideration on merits. On merits, the petitioner argued that the Assessing Officer did not consider the detailed reply submitted by the petitioner in response to the show-cause notice under Section 148A(b). The respondent contended that the reply was considered. The court examined the order under Section 148A(d) and found that it did not reflect any consideration of the petitioner's detailed reply. The court held that the failure to consider the reply amounts to non-application of mind, rendering the order and the consequent notice under Section 148 invalid. The court quashed the order dated 24.03.2023 passed under Section 148A(d) and the notice under Section 148 of the same date. The petition was allowed.
Headnote
A) Income Tax - Reassessment - Section 148A(d) and Section 148 of the Income Tax Act, 1961 - Validity of Reassessment Notice - The petitioner challenged the order under Section 148A(d) and notice under Section 148 for AY 2016-17 on the ground that the Assessing Officer did not consider the detailed reply submitted by the petitioner. The court held that the failure to consider the reply amounts to non-application of mind, rendering the order and notice invalid. (Paras 1-7) B) Income Tax - Jurisdiction - Assessing Officer vs Faceless Assessing Officer - The court had earlier concluded the jurisdictional issue vide order dated 17.09.2025, and thereafter the matter was considered on merits. (Para 2)
Issue of Consideration
Whether the order passed under Section 148A(d) and the notice issued under Section 148 of the Income Tax Act, 1961 for the Assessment Year 2016-17 are valid when the Assessing Officer failed to consider the detailed reply submitted by the petitioner.
Final Decision
The court allowed the petition and quashed the order dated 24.03.2023 passed under Section 148A(d) and the notice under Section 148 of the Income Tax Act, 1961 dated 24.03.2023 for Assessment Year 2016-17.
Law Points
- Reassessment notice under Section 148 must be based on proper application of mind
- Section 148A(d) order must consider assessee's reply
- Failure to consider detailed reply vitiates the order
- Jurisdictional issue of Assessing Officer vs Faceless Assessing Officer
