Bombay HC Quashes Section 148 Proceeding, Orders De Novo Assessment

Anil Kumar Mehta Vs ITO (Bombay High Court)

In Anil Kumar Mehta vs Income Tax Officer (ITO), the Bombay High Court addressed procedural issues surrounding notices under Section 148 of the Income Tax Act, 1961. The petitioner challenged an order dated April 4, 2022, under Section 148A(d) and a subsequent notice dated April 5, 2022, under Section 148. The core contention was the short response period: a notice dated March 21, 2022, was received only on March 28 via Speed Post, leaving the petitioner just one day to respond before the March 29 deadline. The respondent’s counsel, Mr. Khanchandani, acknowledged the procedural irregularity and suggested remanding the matter for reconsideration, allowing the petitioner more time to respond. Accepting this suggestion, the court quashed both the April 4 order and the April 5 notice, remanding the case for de novo consideration. The petitioner was directed to submit a reply by March 8, 2024, while the assessing officer is to issue a reasoned order after providing a personal hearing by April 30, 2024, with proper advance notice. The court’s decision underscores the importance of adhering to procedural fairness in issuing notices.

FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT

1. Petitioner is impugning an order dated 4^th April 2022 passed under Section 148A(d) of the Income Tax Act, 1961 (“the Act”) and the notice dated 5^th April 2022 issued under Section 148 of the Act.

2. One of the primary grounds for challenge is that the notice dated 21^st March 2022 issued under Section 148A(b) of the Act was received by Petitioner only on 28^th March 2022 by Speed Post and the notice required Petitioner to respond on or before 29^th March It is Petitioner’s case that only one day notice has been given even though the notice is dated 21^st March 2022.

3. Mr. Khanchandani, on instructions, states that an e-mail was also sent to Petitioner. At the same time, to avoid dragging the matter and to get into the argument as to whether the e-mail was a correct e-mail and whether it is a good service etc., Mr. Khanchandani suggests, on instructions again that the order dated 4^th April 2022 passed under Section 148A(d) of the Act and the notice dated 5^th April 2022 issued under Section 148 of the Act, both be quashed and set aside and the matter be remanded to de novo consideration. Mr. Khanchandani also suggests that the Court can give Petitioner one week time to file reply to the notice issued under Section 148A(b) of the Act.

4. In view of the fair suggestion made by Mr. Khanchandani, we hereby quash and set aside the impugned order dated 4^th April 2022 and the impugned notice dated 5^th April 2022 issued under Sections 148A(d) and 148, respectively, of the Act and remand the matter for de novo consideration.

5. On or before 8^th March 2024, Petitioner shall reply to the notice dated 21^st March 2022 issued to Petitioner under Section 148A(b) of the Act. The Assessing Officer may pass further orders under Section 148A(d) of the Act in accordance with law and after giving a personal hearing to Petitioner, notice whereof shall be communicated atleast five working days in advance. The order to be passed, which shall be a reasoned order dealing with all submissions of Petitioner, shall be passed on or before 30^th April 2024.

6. Petition No order as to costs.