In CWP No. 10583 of 2022(O&M)- PUNJ HC- P&H HC dismisses petition assailing tax notice issued u/s 148A (b) of Income Tax Act, says procedure as contemplated under Act was followed and authority acted within jurisdiction Justices Tejinder Singh Dhindsa & Pankaj Jain [07-07-2022]

Read Order: Midland Microfin Ltd. v. Union of India and others

LE Correspondent

Chandigarh, July 15, 2022: The High Court of Punjab and Haryana has dismissed a writ petition seeking the issuance of the writ of certiorari for quashing notice issued to the petitioner under Section 148A (b) of the Income Tax Act, 1961, on the ground that the procedure as contemplated under 1961 Act was followed and the authority acted within jurisdiction.

By way of a present writ petition filed under Article 226 of the Constitution, the petitioner sought issuance of writ in the nature of certiorari for quashing notice issued to the petitioner under Section 148A (b) of the Income Tax Act, 1961 dated March 9, 2022;  order passed under Section 148A(d) dated March 31, 2022 along with notice under Section 148 for the assessment year 2018-19.

The petitioner was a Company incorporated under the provisions of the Companies Act, 1956 and an assessee under the Income Tax Act. For the assessment year 2018-19, the petitioner filed the income tax return declaring total income amounting to Rs. 2,26,23,550/-. 

The assessment was completed under Section 143(3) read with Section 144B of the Act vide order dated April 20, 2021. On March 9, 2022 the petitioner was served with notice under Section 148A (b) of the Act for the same assessment year i.e. 2018-19 claiming that the information with the authorities suggested that the income chargeable to the tax for the assessment year 2018-19 has escaped the assessment within the meaning of Section 147 of the Act.

The respondent but the response was not found satisfactory and was rejected vide order dated March 31, 2022 passed under Section 148A(d) which was served upon the petitioner along with notice under Section 148 dated March 31, 2022. 

The petitioner approached the Court seeking writ of certiorari against the proceedings initiated under Section 148A(b) for the assessment year 2018-19 finally culminating in the notice issued under Section 148 of the Act. 

The details of the information and the enquiry on the basis of issuance of notice were supplied to the petitioner along with the said notice. The challenge to the notice under Section 148A (b) and Section 148 was raised contending that the stand of the petitioner was not taken into consideration resulting in miscarriage of justice.

The primary issue which came for consideration before the Division Bench of Justices Tejinder Singh Dhindsa and Pankaj Jain was if at this stage of notice under Section 148,writ Court can  venture into the merits of the controversy when AO is yet to frame assessment/re-assessment in discharge of statutory duty casted upon him under Section 147.

The petitioner’s Counsel relied upon the Supreme Court to contend that the writ petition was maintainable against notice issued under Section 148 of the Act.

After considering the facts of the case and the submissions of the Counsel, the Court observed that in the present case the procedure as contemplated of the 1961 Act was followed and the authority acted within jurisdiction, contrary to petitioner’s allegations to the effect that the order passed under section 148A (d) warranted interference owing to error of fact.

Keeping in view the aforesaid facts and the settled proposition of law, the Court found no reason to interfere at this stage.

As a sequel of the discussion made hereinabove, the present writ petition was dismissed.