Bombay High Court Quashes Reassessment for Five-Day Section 148A(b) Notice

Mukesh J. Ruparel Vs ITO (Bombay High Court)

Summary: The Bombay High Court quashed the reassessment-related proceedings against Mukesh J. Ruparel for Assessment Year 2016-17 after finding multiple defects in the statutory process preceding issuance of the notice under Section 148A (b) of the Income Tax Act, 1961. The petitioner, an individual who had not filed a return because his income was below the taxable limit, challenged a notice dated 15th March 2023, the order dated 31st March 2023 under Section 148A(d), and the consequent notice under Section 148.

The first and decisive defect concerned the time allowed to respond. The notice dated 15th March 2023 required the petitioner to show cause by 20th March 2023, effectively allowing only five days. The Court reproduced Section 148A(b), which requires a period of not less than seven days and not more than thirty days from the date of issue, and referred to the guidelines dated 1st August 2022. The Court held that the minimum seven-day period was a mandatory requirement and that failure to comply rendered the notice invalid.

The Court also found that the approval under Section 151 annexed to the impugned order related to another assessee, Poonam Vijay Chhabria, and carried a different PAN. This was treated as an indication of non-application of mind. The Court further noted that the order under Section 148A(d) did not state the amount of income alleged to have escaped assessment, although the guidelines contemplated specification of the quantum of escaped income, assets, expenditure or entry.