Sahil Infra Creative Pvt Ltd v. ITO (Surat) ( Guj)( HC)

S. 148A: Reassessment – Conducting inquiry, providing opportunity before issue of notice – Shell company – Natural justice – Reply was filed in response to notice under the old regime – Order passed without considering the objection was set aside – Directed to pass the order considering the objections filed by the assessee. [S.143(2), 148, 148A(b), 148A(d), Art , 226 ]

The petitioner engaged in the business as a builder, land-organiser, developer of lands and such other infrastructural projects, filed its return of income along with computation of income for the Assessment Year 2016-2017 declaring a loss of Rs. 8,24,444/- on 4.10.2016. Thereafter, on 30.6.2021, the Income Tax Officer issued notice under section 148 of the Income Tax Act, 1961 . The petitioner filed its return of income and requested a copy of the reasons recorded by the officer. The Assessing Officer supplied a copy of the reasons recorded.  The petitioner objected to the reasons recorded and filed its detailed objections by letter dated 11.10.2021.  The objection was not disposed of by the AO. The new regime containing newly inserted provisions relating to reassessment inter alia section 148A was brought into the statute book with effect from 1.4.2021. The Petitioner did not receive any notice under section 148A(b) of the Act, however, it was stated that while checking the portal, the Petitioner came across the notice under section 148A(b) of the Act for the first time and order under section 148A(d) passed became known, as well as notice under section 148 of the Act thereafter came to be issued.  The petitioner filed writ petition and contended that they had responded to the earlier notice issued by the department under the old or unamended provisions by filing the objections, which were not decided. It was submitted that the response given by the petitioner in the form of objections to the notice issued under the unamended provisions may be treated as a reply to the notice under section 148A(b) of the Act to which the petitioner could not file any response. Petitioner relied on Dharampal Satyapal Ltd. v. Dy. Commissioner of C.Ex., Gauhati [(2015) 8 SCC 519] for the proposition of violation of the principle of natural justice as the earlier objections were not considered. Allowing the petition the Court held that the reply-cum-objections dated 11.10.2021 of the petitioner shall be treated by the Assessing Officer as a response to the notice dated 23.05.2022 issued under Section 148A (b) of the Act. The contents of the said reply-cum-objections shall be considered and shall be taken into account in deciding the notice dated 23.05.2022 afresh, which shall be decided in accordance with law and on its own merits. ( SCA No.2390 pf 2023 dt . 5 -5 -2023  )( AY. 2016 -17 )  

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