R.K. Buildcreations Private Limited Vs ITO (Rajasthan High Court)
The Rajasthan High Court has set aside an order and subsequent proceedings initiated by the Income Tax Officer (ITO) against M/s R.K. Buildcreations Private Limited for the Assessment Year (AY) 2015-16. The court’s decision, delivered in the case of R.K. Buildcreations Private Limited Vs ITO, hinged on the tax department’s failure to strictly adhere to the procedural requirements laid down in Section 148A of the Income Tax Act, 1961, as amended by the Finance Act, 2021, and interpreted by the Supreme Court.
Also Read SC Judgment: SC Dismisses Reassessment Case for Non-Compliance with Section 148A
The case originated with the petitioner company filing its income tax return for AY 2015-16 declaring NIL income on November 4, 2015. Subsequently, on June 30, 2021, a notice under the erstwhile Section 148 of the Act was issued, indicating a belief that income chargeable to tax had escaped assessment for the said year.
Following the landmark judgment of the Supreme Court in the case of Union of India Vs. Ashish Agarwal (2022) 444 ITR 01 (SC) on May 4, 2022, which addressed the validity of notices issued under the old regime post the enactment of the Finance Act, 2021, the tax department initiated proceedings under the newly inserted Section 148A. Consequently, a notice under Section 148A(b) was issued to the petitioner on May 30, 2022, providing an opportunity to show cause why a notice under Section 148 should not be issued.
