2023 (1) TMI 1372 - HC - Income Tax

Validity of notice issued u/s 148A - assessment order triggered on account of a notice issued u/s 148 i.e., the old regime - scope of new regime - petitioner, says that the impugned order and notices cannot be sustained, because revenue have already passed an assessment order u/s 147 r.w.s. 144B of the Act - HELD THAT - In our view, prima facie, the impugned order and the notices are unsustainable as the respondents/revenue have already passed an assessment order, qua which an appeal is pending with the CIT(A). Issue notice. In case instructions are received to resist the writ petition, counter affidavit will be filed before the next date of hearing. List the matter 03.02.2023. In the meanwhile, the AO is restrained from continuing with the assessment/reassessment proceedings which have been triggered on account of the impugned order and notice.

Summary

Issues:
Challenge to notice dated 25.05.2022 under Section 148A(b) of the Income Tax Act, 1961; Challenge to order dated 31.07.2022 under Section 148A(d) and consequential notice of the same date issued under Section 148; Sustainability of impugned order and notices due to prior assessment order dated 28.03.2022 under Section 147 read with Section 144B; Validity of observation in the impugned order rendering the assessment order dated 28.03.2022 "non est"; Instructions to resist the writ petition; Restraint on the AO from continuing assessment/reassessment proceedings.

Analysis:
The writ petition challenges a notice dated 25.05.2022 under Section 148A(b) of the Income Tax Act, 1961, along with an order dated 31.07.2022 under Section 148A(d) and a consequential notice issued under Section 148 on the same date. The petitioner argues that these orders and notices are unsustainable as an assessment order dated 28.03.2022 was already passed under Section 147 read with Section 144B of the Act. The petitioner has appealed against the said order to the CIT(A), which is pending consideration. The assessment order dated 28.03.2022 was triggered by a notice under Section 148 of the Act, received via email on 31.03.2021. The impugned order dated 31.07.2022 erroneously states that the assessment order dated 28.03.2022 is "non est," which the petitioner argues is legally incorrect as the AO had become functus officio after passing the said order.

The court finds prima facie that the impugned order and notices are unsustainable since an assessment order is already in place, and an appeal is pending with the CIT(A). The respondents/revenue accept notice and state they will return with instructions. If they decide to resist the writ petition, a counteraffidavit will be filed before the next hearing date. The matter is listed for 03.02.2023, and in the meantime, the AO is restrained from continuing with the assessment/reassessment proceedings initiated based on the impugned order and notice. The parties are instructed to act based on a digitally signed copy of the order.