K K Agarwal and Sons HUF Vs ITO (Calcutta High Court)
Tax authorities can initiate afresh proceeding if earlier proceeding was invalid as per law
The Hon’ble Calcutta High Court (“the High Court”) in the case of M/s. KK Agarwal and Sons HUF v. Income Tax Officer (WPA 25770 of 2022) dated December 14, 2022, held that Income Tax authorities can initiate afresh proceedings if the previous proceeding were invalid as per law.
Facts:
M/s. KK Agarwal and Sons HUF (“the Petitioner”) was issued a Notice under Section 148A(b) of the Income Tax Act, 1961 (“the IT Act”) for initiating assessment for the Financial Year 2015-16. The Notice was issued by the Principal Commissioner of Income Tax (“the PCIT”) who did not have the jurisdiction to issue the Notice for initiating assessment after the lapse of 3 Assessment Years. Thereafter, the proceedings were initiated by the tax authorities.
The Petitioner filed the Writ Petition l before the High Court, contending that, since the PCIT did not have the jurisdiction to issue the Notice, therefore, the Notice itself along with all subsequent proceeding would become invalid as per law.
Issue:
1. Whether the PCIT can issue Notice under Section 148A(b) of the IT Act for the period beyond his jurisdictional power?
2. Whether the tax authorities can initiate afresh proceeding, ones the previous proceeding was quashed on the ground being invalid as per law?
Held:
The High Court held that:
