BIJENDRA SINGH S/O POHAP SINGH vs. PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX

Facts

The petitioner, Bijendra Singh, filed a writ petition challenging a pre-reassessment notice dated March 16, 2022, issued under Section 148A(b) of the Income Tax Act, 1961, an order dated March 27, 2022, passed under Section 148A(d), and a notice dated March 27, 2022, issued under Section 148. The petitioner contended that the notice under Section 148A(b) did not provide the mandatory minimum seven days for response. Furthermore, the petitioner argued that the notice was barred by limitation under Section 149(1)(a) as the assessment year was 2015-16 and the amount involved was less than Rs. 50,00,000. A crucial fact highlighted was that the notice sent to the petitioner was returned undelivered on March 28, 2022, while the order under Section 148A(d) was passed on March 27, 2022.

Held

The Tribunal held that the writ petition filed by the petitioner is allowed and the impugned notices and order are quashed and set aside. On the first issue, the Tribunal, relying on the Supreme Court's decision in Pioneer Motors (Private) Ltd. vs. The Municipal Council, Nagrecoil, held that the requirement of 'not less than seven days' necessitates the exclusion of both the date of issue/posting and the last date for response. Since the notice dated March 16, 2022, posted on March 17, 2022, with a response date of March 23, 2022, did not provide a clear seven days, it violated the mandatory provisions of Section 148A(b). Regarding the limitation issue, the Tribunal noted that the petitioner's bank account statement for Assessment Year 2015-16 showed cash deposits totaling Rs. 42,15,000, which is less than Rs. 50,00,000. As the notice was issued on March 16, 2022, beyond three years from the end of the relevant assessment year, it was ex-facie barred by limitation under Section 149(1)(a) and consequently without jurisdiction. The Tribunal also found the revenue's action of passing the order under Section 148A(d) on March 27, 2022, while the notice was returned undelivered on March 28, 2022, to be a mechanical exercise of power, further vitiating the proceedings. The operative direction was to quash and set aside the notice dated March 16, 2022, the order dated March 27, 2022, and the notice dated March 27, 2022.

Key Issues

1. Whether the notice issued under Section 148A(b) of the Income Tax Act, 1961, providing a response date of March 23, 2022, for a notice dated March 16, 2022 (posted on March 17, 2022), complies with the requirement of 'not less than seven days' as stipulated in the said provision, considering the exclusion of terminal days. 2. Whether the notice issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2015-16, is barred by limitation under Section 149(1)(a) of the Act, given that the alleged amount of escaped income is less than Rs. 50,00,000. 3. Whether the proceedings initiated by the revenue are vitiated due to the order under Section 148A(d) being passed on March 27, 2022, despite the notice sent to the petitioner being returned undelivered on March 28, 2022. Assessee's Contentions: - The notice under Section 148A(b) is bad as it fails to provide the mandatory minimum seven days for response. The petitioner relied on the Supreme Court's decision in Pioneer Motors (Private) Ltd. vs. The Municipal Council, Nagrecoil. - The notice is barred by limitation under Section 149(1)(a) as the amount involved (Rs. 42,15,000) is less than Rs. 50,00,000 and the notice was issued after more than three years from the end of Assessment Year 2015-16. - The proceedings are vitiated by the arbitrary manner in which the order under Section 148A(d) was passed before the notice was even confirmed as served. Revenue's Contentions: - The petitioner did not file any response to the notice, compelling the respondents to pass the impugned order. - The challenge to jurisdiction under Section 149(1)(a) could only be determined by the authority concerned and not merely on the petitioner's indications. - The revenue fairly conceded that the notice did not comply with the requirement of Section 148A(b) regarding the time granted for response and prayed for a remand.