The only question here is whether reasons could at all be recorded after issuance of the notice under Section 148 of the Act. And, secondly, that as the reasons were recorded after the issuance of Section 148 notice, whether the proceedings were not vitiated.
Decision of the High Court of Karnanataka – Commissioner of Income Tax, (Exemptions) v. Baldwin Boys High School: 364 ITR 637(Karnataka) – this very question of whether a notice under Section 148 of the said Act could be issued without recording reasons came up for consideration. The Karnataka High Court observed as under:-
“6. Section 148 of the Act provides for issue of notice where the income has escaped assessment. Subsection (2) of section 148 of the Act provides that the Assessing Officer shall, before issuing any notice under this section, record his reasons for doing so. In view of this provision, no dispute was raised before us about the procedure contemplated under this provision. From a bare perusal of section 148 of the Act, it is clear as crystal that the Assessing Officer is obliged to record reasons before issuing notice under section 148 of the Act….”
We have seen from the provisions of Section 148(2) as also the decisions of this Court in Haryana Acrylic (supra), and that of the Karnataka High Court in Baldwin Boys High School (supra), that the reasons have to be recorded prior to the issuance of notice under Section 148. If they are not so recorded, then the notice under Section 148 and proceedings pursuant thereto are without authority of law. In the present case, it is evident that the reasons were recorded only on 18.09.2012, i.e., after the notice under Section 148 had been issued on 30.08.2012. Clearly, the statutory provisions, as explained by judicial decisions, indicate that the notice under Section 148 would be invalid and consequently all proceedings pursuant thereto would also be vitiated.