The Calcutta High Court has quashed a re-assessment order on the ground of non-compliance of section 148A notice as per the Income Tax Act, 1961 and directed the petitioner Matrix Commodeal Pvt. Ltd. to pay a cost of Rs. 5000 petitioner to the Calcutta High Court Legal Services Committee.
Petitioner was aggrieved by the issuance of impugned notice under section 148 of the Income Tax Act, 1961 on the grounds that the same is barred by limitation and that the respondent-income tax authority concerned, before issuing the impugned notices under section 148 of the 1961 Act, has not observed the statutory formalities under section 148A of the 1961 Act as prescribed by the Finance Act, 2021 which are applicable with effect from 1st April 2021 before issuance of notices under section 148 of the 1961 Act on or after 1st April 2021.
Justice Md. Nizamuddin observed thatthis case clearly falls under the amended Act relating to proceedings under section 147 of the Act under which issuance of notice under section 148A of the Act is mandatory before issuing any notice under section 148 of the amended Act which has not been complied with in this case.
Relying on a catena of decisions, the Court quashed the impugned notice under section 148 of the Act and all subsequent proceedings are not sustainable in law.
“However, quashing of the impugned notice and proceeding will not debar the respondent-authorityconcerned to issue any fresh notice in future in accordance with law,” the Court said.
Quashing the order, the Court held that “this writ petition is allowed subject to payment of costs of Rs.5,000/- to the Calcutta High Court Legal Services Committee, since the impugned notice under section 148 of the Income Tax Act, 1961 has been issued on 31st March, 2021 as appears from record and this writ petition has been filed in April 2022, that is, almost after ten months from receipt of the impugned notice, without any explanation for such delay in filing this writ petition. Such costs has to be paid by the petitioner to the Calcutta High Court Legal Services Committee within seven days from date which is to be utilised by it for the benefit and welfare of the children staying with their parents in the correctional home in West Bengal. Receipt of payment is to be produced before this court.”
Advocates Mr. AvraMazumder, Mr. K. Roy, Mr. B. Gupta, Mr. Sk. Md. Bilwal Hossain appeared for the petitioner.
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