Second notice issued u/s 148 of Income Tax Act without disposing return filed to first notice is not valid: Calcutta HC [Read Order]

The Calcutta High Court(HC)held that the second notice issued u/s 148 of the Income Tax Act without disposing return filed to the first notice is not valid.

Messrs. Elite Pharmaceuticals, the petitioner questioned whether a second notice under Section 148 of the Income Tax Act, 1961 issued by the assessing officer after the expiry of one year as per Section 153(6)(i) is valid without disposing of the return filed to the first notice issued under Section 148 of the Income Tax Act for the very same assessment year.

In the case of S. Raman Chettiar vs. CIT, the Court held that “when a return is furnished by the assessee in consequence of a notice issued under Section 34 of the Income Tax Act, 1922, it was not open to the Income Tax Officer to ignore that return and issue a further notice under Section 34(1)(a) on the assumption that there had been an omission or failure on the part of the assessee to make a return of his income.”

The underlying legal principle is that, when a notice under Section 148 of the Act is issued, the original assessment proceedings are entirely opened up or left open and the finality which had occurred in the first assessment order does not exist any longer.

Further observed that without disposing of the return of income filed by the assessee in response to the first notice, the assessing officer could not have issued a second notice for reopening the assessment which, at the relevant point in time, did not exist in the eye of law.”

A Single member consists of Justice Md. Nizamuddin observed that the respondent assessing officer concerned was not justified in law in issuing impugned second notices under Section 148 of the Income Tax Act, 1961, relating to the same assessment years instead of completing the assessment on returns filed in response to the first notices under Section 148 of the Act.

Further viewed that the action of the assessing officer allowing the expiry of period of limitation of one year to complete the assessment as per Section 153(6)(i) of the Income Tax Act, 1961, from the date of order of this Court in earlier writ petition on the first notices under Section 148 of the Act relating to same assessment year and issuing second notice in respect of the very same assessment year is not legal and valid.

The impugned second notices under Section 148 of the Income Tax Act, 1961, relating to assessment years 2012-13 and 2013-14 and all subsequent proceedings are quashed by the Court.

To Read the full text of the Order CLICK HERE

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