A division bench of the Calcutta High Court has held that re-assessment under section 148A of the Income Tax Act, 1961 cannot be initiated without furnishing full information on the basis of which the assessment is initiated.
Justice T.S.Sivagnanam and Justice Bivas Pattanayak was considering an appeal filed by M/s Maharaja Edifice Pvt. Ltd against whom the Assessing Officer issued a notice under section 148A of the Income Tax Act, 1961. On receipt of the notice, the assessee found there was no attachment as Annexure. Therefore, the assessee submitted his response through e-proceedings on 21.03.2022 pointing out that they have not been furnished the annexure said to have been appended to the notice under Section 148A(b) dated 16.03.2022. There was no reply given by the Assessing Officer but another notice under Section 148A(b) of the Act dated 21.03.2022.
Quashing the impugned order, the division bench has observed that “It is surprising to find that in the said order the officer has furnished information which is running to more than seven paragraphs. This information was not furnished to the assessee at the first instance and what was appended to the notice dated 21.03.2022 was only case related information details. Therefore, this court is convinced that there has been violation of principles of natural justice inasmuch as the appellant was not furnished with full information based on which the assessment was sought to be reopened.”
Directing a fresh adjudication, the Court held that “For the above reason, the writ appeal as well as the writ petition is allowed. The order under Clause (d) of Section 148 A of the Act dated 07.04.2022 is set aside and the matter is remanded to the Assessing Officer to the position when he issued notice under Section 148A(b) of the Act dated 21.03.2022. The assessee is directed to take note of the information mentioned in the order dated 07.04.2022 passed under Clause (d) of Section 148A of the Act as the basis for reopening and submit their objections within 10 days from the date of receipt of server copy of this order and on receipt of the affidavit of opposition the Assessing Officer shall proceed to complete the assessment in accordance with law.”
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