The Meghalaya High Court has quashed a re-assessment under section 148(d) of the Income Tax Act, 1961 on the ground that the same was passed without considering the reply filed by an assessee to the initial notice issued under Section 148A(b).
Section 148 grants an Assessing Officer the power to either assess or re-assess any taxable income that may have gone under the radar and has not been assessed as per the stipulated guidelines of the Income Tax Act.
Here, the assessing officer issued an initial notice under clause (b) of Section 148A of the Act for assessment year 2015-16 was issued to the assessee on March 23, 2022. Such notice required the assessee to show cause why a notice under Section 148 of the Act should not be issued. The petitioner responded to the show-cause notice and such reply was duly lodged.
However, the impugned order under clause (d) of Section 148A of the Act was issued on April 1, 2022 without taking the petitioner’s response to the initial notice into consideration. The same would be apparent from the penultimate paragraph of the impugned notice of April 1, 2022 which records that no reply was furnished by the assessee in response to the notice under Section 148A(b) of the Act.
A Division Bench comprising of Chief Justice Sanjib Banerjee and Justice W. Diengdoh of Meghalaya High Court has held that “since there appears to be an error apparent on the face of the impugned order passed under Section 148A(d) of the Act dated April 1, 2022 and the Department failed to consider the assessee’s written response that was received by the Department on March 30, 2022, the impugned order of April 1, 2022 cannot be sustained and the same is set aside. As a consequence, the notice under Section 148 of the Act also dated April 1, 2022 is quashed with liberty to the Department to issue a fresh notice in accordance with law, if the Department is so entitled.”
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