The division bench of Madras High Court presided by Mr. Justice R. Mahadevan and Mr. Justice J.Sathya Narayana Prasad has invalidated the continuation of reassessment proceedings for want of fresh notice.
The appellant, Charu K. Bagadia is an assessee on the file of the second respondent, Assistant Commissioner of Income Tax Corporate Circle – 4 (2), Chennai. The appellant filed the income proposed by the Assessing Officer under section 143(1).
After a period of five years, the appellant received a notice issued by the first respondent, Assistant Commissioner of Income Tax-23(2), Mumbai under Section 148 of the Act purportedly to re-assess the return of income submitted for the assessment year 2011-2012. The appellant replied stating that the first respondent has no jurisdiction to issue such notice under Section 148 of the Act and therefore, she requested to drop the reassessment proceedings. Subsequently, the first respondent transferred the files of the appellant to the second respondent and the second respondent continued the reassessment proceedings under section 143(2) r/w 129 of the Act, directing the appellant to appear and file the return of income to the notice under section 148 of the Act along with supportive documents. The aggrieved appellant filed a Writ petition.
While deciding the Wirt petition the single bench held that the notice initially issued by the first respondent against the appellant though improper, need not be set aside, because the said proceedings were subsequently transferred to the Income Tax Authorities at Chennai. Aggrieved, the appellant preferred to appeal before the division bench.
The division bench observed that the first respondent, reopening the assessment under section 148(2), has no jurisdiction over the appellant, to issue a notice under section 148(1). Though the files about the reassessment proceedings of the appellant were transferred, the second respondent has no authority to continue the reassessment proceedings under section 129 and hence, the notice issued by him is also held to be invalid. The invalid notices so issued by the respondents vitiate the entire reassessment proceedings initiated against the appellant. The Supreme Court further observed that no notice under section 148 was issued by the second respondent, who is the jurisdictional assessing officer, for the reassessment of the return of income of the appellant, within the time frame stipulated under the Act.
The division bench of Madras High Court while allowing the Writ petition has held that the limitation period of six years for reopening the assessment for the year 2011-12 under section 147 of the Act, came to an end on 31.03.2018 and there is no requirement to go into the other issue based on the factual matrix, whether the appellant has disclosed fully and truly all the material particulars that are necessary for assessment for the relevant assessment year.
Ms.Vandana Vyas appeared on behalf of the appellant and Mrs. Hema Muralikrishnan appeared on behalf of the respondents.
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