The Delhi High Court set aside the order under section 148A(d) of the Income Tax Act,1961 passed without considering petitioner’s responses being invalid.
Mr Ved Jain, Mr. Nishchay Kantoor & Ms. Richa Mishra appeared for the petitioner and Mr. Ruchir Bhatia, Sr. Standing Counsel for Revenue with Ms.Mansie Jain, Advocate. Mr. Ranvir Singh appeared for the respondent.
Ratnagiri Gas and Power Private limited, the petitioner challenged the order dated 25th July, 2022, passed under Section 148A(d) of the Income Tax Act, 1961, (‘Act’) and the notice dated 25th July, 2022, issued under Section 148 of the Act for the Assessment Year (‘AY’) 2013-14.
The Assessee filed its original Income Tax Return for subject AY 2013-14, declaring a loss and the Assessing Officer (‘AO’) passed an assessment order under Section 143(3) of the Act after making certain disallowances. He states that the financial statements of the petitioner were during the assessment proceedings and the said financial statements specifically dealt with ‘Employee Benefits Expense’.
A notice under Section 154 of the income tax Act read with Section 159 of the Act was issued stating that an amount of Rs 6.29 Crores debited in the Profit & Loss Account towards prior period under the head ‘Wages & Salaries’ was an inadmissible expenditure and was proposed to be disallowed. He states that the Assessee filed its reply to the said notice and explained that the expenditure has crystallized during the year under consideration and is thus, an allowable expenditure.
The petitioner contended that the reply was filed on the dated 13th June, 2022, before the AO and specifically challenged that the proceedings are barred by limitation on account of first proviso to amended Section 149 of the Act as well as first proviso of un-amended Section 147 of the Act. Further contended that the income alleged to have escaped assessment was not represented in the form of ‘asset’ and thus, the proceedings are barred by limitation.
It was stated that the re-opening is sought on the basis of the change of opinion, which was not permissible. On perusal of the paper book, Justice Manmohan and Justice Manmeet Pritam Singh Arora observed that the petitioner’s responses dated 13th June, 2022, and 30th June, 2022, have not been considered by the AO while passing the impugned order under Section 148A(d) of the Act.
The Tribunal set aside the impugned order passed under Section 148A(d) of the Act as well as the notice issued under Section 148 of the Act, both dated 25th July, 2022and the matter was remanded back to the AO for a fresh decision to be given in accordance with law.
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