Dipawali Vimal V. ITO, Ward 3(1) Gaya

CWJC/7573/2023

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The case involves Dipawali Vimal, the petitioner, who challenged an order issued under Section 148A(d) of the Income Tax Act, 1961, by the ITO, Ward 3(1) Gaya. The dispute centered on the initiation of reassessment proceedings for the assessment year 2019-20, which the petitioner argued were barred by the limitation period. The respondent contended that the proceedings were validly initiated under the newly introduced faceless assessment provisions of Section 148A. The court examined the timelines and legal provisions applicable to the issuance of notices under Sections 148 and 149, ultimately finding that the notice to the petitioner was issued after the statutory period had expired, thus invalidating the proceedings.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 799875 (HC-PATNA)
• Appeal Type: Others
• Pronouncement Date: 06-10-2023
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: ARCHANA SINHA
• Assessee Lawyers: D V PATHY
• Keywords: Faceless assessment; Income Tax; Limitation; Re-assessment
• Section: 148; 149; 148A(d); 148A

Judgement Text

"IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.7573 of 2023 ====================================================== Dipawali Vimal W/o of Shri Vimlendu Vimal resident of South Church Road, Healing Touch Hospital, Behind Kochar Petrol Pump, Gaya Bihar - 823001. ... ... Petitioner/s Versus ITO, Ward 3(1) Gaya. ... ... Respondent/s ====================================================== Appearance : For the Petitioner/s : Mr. D.V.Pathy, Advocate For the Respondent/s : Mrs.Archana Sinha @ Archana Shahi, Sr. S.C. ====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE RAJIV ROY ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE) Date : 06-10-2023 The petitioner, an assessee under the Income Tax Act, 1961, is aggrieved with the order issued under Section 148A(d) of the Income Tax Act, 1961; on the ground of limitation having expired for any proceeding under Section 148 to be initiated. The assessment year is 2019-20 and the date of order passed under clause(d) of Section 148A is 21.04.2023. 2. We have heard Sri. D.V. Pathy, the learned counsel for the petitioner and Smt. Archana Sinha, learned Senior Standing Counsel appearing for the Department. 3. Section 148 deals with issuance of notice Patna High Court CWJC No.7573 of 2023 dt.06-10-2023 2/4 where income has escaped assessment. It mandates that before making re-assessment or re-computation under Section 148, the Assessing Officer shall serve on the assessee a notice requiring him to furnish within such period, as maybe specified in the notice, return of his income or the income of any other person in support of which he is assessable under the Act during the previous year corresponding to the relevant assessment year. 4. Section 149 provides for the time limit for the notice to be issued under Section 148. Under Clause(a) of sub-section (1), 3 years time is provided from the end of the relevant assessment year unless the case falls under clause(b). Insofar as the clause(b) is concerned, the limitation is 10 years from the end of the relevant assessment year, provided the escaped assessment amounts to or is likely to amount to Rs. 50 lakh or more. In the present case, the order under clause (b) of Section 148A itself is passed on 21.04.2023 after the expiry of the three year period and the total amounts likely to have escaped assessment is indicated as Rs. 13,93,500/-. 5. Learned Senior Standing Counsel for the Patna High Court CWJC No.7573 of 2023 dt.06-10-2023 3/4 Department argued that in fact Annexure-1 is the initiation of the proceedings, which was on 31.03.2023 on introduction of the faceless assessment by way of Section 148A of the Income Tax Act. There is requirement for issuance of notice under Section 148A(a) and an order under clause(d) prior to the notice issued under Section 148A; which provision (Section 148A) is introduced newly under the I.T. Act. The notice under Section 148A is issued within a three year period, is the contention. 6. It is to be noticed that Section 148A was brought in by the Finance Act, 2021 with effect from 01.04.2021 when Section 148 also stood substituted. Section 148A deals with the inquiry and the opportunity being provided before issuance of notice under Section 148. However, under Section 149, which also stood substituted by Finance Act, 2021, the limitation provided is for the notice under Section 148 and not of inquiry or opportunity for hearing under Section 148A. 7. The relevant assessment year is 2019-20 and three years end on 31.03.2023. There is no notice issued under Section 148 as on date. The proceedings, hence, Patna High Court CWJC No.7573 of 2023 dt.06-10-2023 4/4 cannot be continued and we find Annexure-3 order under Section 148(d) to be not enabling the Department to proceed under Section 148. 8. The writ petition stands allowed. Sujit/- (K. Vinod Chandran, CJ) ( Rajiv Roy, J) AFR/NAFR NAFR CAV DATE Uploading Date 10.10.2023 Transmission Date "