Facts of the Case

The petitioner challenged a notice dated 17.08.2024 issued under Section 148A(b), an order dated 31.08.2024 passed under Section 148A(d), and a notice of even date issued under Section 148 of the Income Tax Act, 1961 for Assessment Year 2018-19. The petitioner contended that the reassessment proceedings were initiated without due consideration of his reply and without proper jurisdiction.

 

Issues Involved

  1. Whether the order passed under Section 148A(d) was vitiated for non-consideration of the petitioner’s reply.
  2. Whether the Assessing Officer applied his mind to the explanations furnished by the petitioner before initiating reassessment.
  3. Whether reassessment proceedings could continue in light of the jurisdictional challenge based on the CBDT Notification dated 29.03.2022.

 

Petitioner’s Arguments

  • The impugned order under Section 148A(d) was passed without considering the detailed reply furnished by the petitioner.
  • The Assessing Officer mechanically reproduced the contents of the show cause notice without addressing the petitioner’s explanation.
  • Interest income alleged to have escaped assessment had already been disclosed and taxed.
  • The Assessing Officer lacked jurisdiction to initiate reassessment proceedings post issuance of the CBDT notification dated 29.03.2022.

 

Respondent’s Arguments

  • The Assessing Officer had sufficient material indicating escapement of income, including alleged transactions with entities involved in issuing bogus sale and purchase bills.
  • Information regarding TDS deductions indicated that certain interest income had escaped assessment.
  • The reassessment proceedings were validly initiated in accordance with law.

 

Court Order / Findings

  • The Court observed that the impugned order under Section 148A(d) was a substantial reproduction of the show cause notice issued under Section 148A(b).
  • The Assessing Officer failed to consider the petitioner’s explanation that the interest income had already been assessed to tax.
  • The absence of any reasoning or application of mind rendered the order unsustainable in law.
  • The impugned order was therefore set aside and the matter was remanded to the Assessing Officer.

 

Important Clarification

The Court clarified that:

  • Orders under Section 148A(d) must reflect due consideration of the assessee’s reply and cannot be passed mechanically.
  • Principles of natural justice require the Assessing Officer to apply his mind and pass a reasoned order.
  • The jurisdictional issue arising from the CBDT Notification dated 29.03.2022 was left open and made subject to the outcome of pending batch matters.

 

Final Outcome

The writ petition was disposed of by setting aside the impugned order passed under Section 148A(d). The matter was remanded to the Assessing Officer to reconsider the petitioner’s reply and pass a fresh, reasoned order within four weeks, in accordance with law. Reassessment proceedings were permitted to continue, subject to the outcome of pending proceedings on the jurisdictional issue.

Link to download the order - https://www.mytaxexpert.co.in/uploads/1770115493_VIVEKKUMARVsINCOMETAXOFFICERANR..pdf

 

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.