The Jharkhand High Court held that initiating reassessment proceedings after 10 years post-search is valid on Taking Previous Sanction from a Competent Authority. The two-judge bench viewed that there is no illegality to the initiation of reassessment proceeding by issuing notice under Section 148 of the Income Tax Act, 1961
Mr. Naresh Kumar Kejriwal, the Petitioner is an individual and chartered accountant by profession.Devika Constructions Pvt. Ltd., the Petitioner is a company registered under the Companies Act, of 1956 and is engaged primarily in the construction and development of residential flats, commercial establishments and schools.
The dispute relates to the issuance of notice dated 31.03.2023 to the respective Assessees issued under section 148 of the Act by the Respondent. The basis of issuance of the aforesaid notices was stated to be search and seizure operations conducted on the business premises of Mr Naresh Kumar Kejriwal on 09.06.2022. Pertinently, Devika Constructions was only subjected to survey under section 133A of the Act. Thus, in both these writ applications, the petitioners have challenged the jurisdiction for issuance of notice under Section 148 of the Act.
Ms. Kavita Jha, counsel assisted by Ms. Lavanya Gadodiaappeared for the Assessee in both these writ applications. Mr. R. N. Sahay, senior standing counsel appearing for the revenue submitted that Section 149 of the Act prescribes limitation to issue notice under Section 148 of the Act. He further submitted that with the amendment made by the Finance Act, 2021, though Section 153A is no longer applicable for making an assessment of income where a search has been conducted on or after 01.04.2021
Since the search was conducted on 09.06.2022, then as per the first proviso of Section 149 read with unamended Section 153A and 153C and also the amended Section 148 explanation 2 the assessing officer could and has rightly issued a notice under Section 148 of the I.T. Act. for the AY 13 – 14
It was true that in the newer provision of reassessment, in cases where a search is initiated after 01.04.2021, it is required to be made as per provisions contained in sections, 148, 149 and 151.
A division bench of Justice Rongon Mukhopadhyay and Justice Deepak Roshan held that A.O was justified in reopening the assessment for A.Y.13-14 in the case of both the Assessees for 10 years as they have rightly taken previous sanction of the competent authority.There is no illegality, whatsoever, about initiation of reassessment proceeding by issuing notice under Section 148 of the Income Tax Act.
The Court dismissed the writ applications without interfering with the respective show-cause notices.
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