The sufficiency or reasonableness of the reasoning in an order under Section 148A(d) (of Income Tax Act, 1961) cannot be challenged in the writ court.

In a pivotal judgement, the Calcutta High Court has provided clarity on the nuances of Section 148A(d) (of Income Tax Act, 1961). The case at hand involved Rachna Singhi, who took issue with an order under Section 148A(d) (of Income Tax Act, 1961) pertaining to the assessment year 2019-20.

Singhi expressed her dissatisfaction with the rationale provided by the Income Tax Officer (ITO) in his order. The court, however, found no violation of natural justice principles, procedural irregularities, or contravention of specific Act provisions in the order.

The High Court emphasized that the writ court cannot question the sufficiency or reasonableness of the reasoning in an order under Section 148A(d) (of Income Tax Act, 1961) if the petitioner has already had the opportunity to file an objection.

The court further noted that despite the Assessing Officer's differing findings and conclusions, Singhi still has ample opportunities in the subsequent proceedings following the Section 148 (of Income Tax Act, 1961) notice to present her case.

Importantly, the court stated that an order under Section 148A(d) (of Income Tax Act, 1961) does not constitute a final assessment order and does not generate a tax demand.

This judgement offers a fresh perspective on the interpretation and application of Section 148A(d) (of Income Tax Act, 1961), and is expected to influence similar disputes in the future.

This ruling serves as a reminder to all taxpayers to understand the intricacies of the Income Tax Act and its various sections. It also underscores the judiciary's role in interpreting and enforcing these rules. By clarifying the implications of Section 148A(d) (of Income Tax Act, 1961), the court has provided much-needed clarity and guidance to taxpayers and tax professionals alike.

Court Name : Calcutta High Court

Parties : Rachna Singhi Vs ITO (Calcutta High Court)

Decision Date : 12 June 2023

Judgement ref. : WPA 10215 of 2023

By this writ petition, petitioner has challenged the impugned order under Section 14A(d) (of Income Tax Act, 1961) dated 30th March, 2023 relating to assessment year 2019-20. I have perused the order and considered the submission of the parties.

Petitioner is not satisfied with the reasoning given by the respondent/Income Tax Officer in his impugned order dated 30th March, 2023. The aforesaid impugned order has neither been passed in violation of

principles of natural justice nor there is any procedural irregularity, nor the impugned order is contrary to any specific provisions of any Act.

Sufficiency of the reason or reasonableness of the reason in an impugned order under Section 148A(d) (of Income Tax Act, 1961) cannot be gone into by the writ court when petitioner was already given an opportunity to file objection by the petitioner and the same was considered by the Assessing Officer though he may have come to a different finding and conclusion.

Furthermore, petitioner still has ample scope in the proceedings subsequent to the notice under Section 148 (of Income Tax Act, 1961) after passing the order under Section 148A(d) (of Income Tax Act, 1961) to make out a case if she has in her favour. I am also of the view that the order under Section 148A(d) (of Income Tax Act, 1961) is neither final assessment order nor any demand arises out of the same.

In view of the discussion made above, I am not inclined to entertain this writ petition being WPA 10215 of 2023, and accordingly, the same is

dismissed.

However, dismissal of this writ petition will not be a bar on the part of the petitioner to raise all the points in the impugned proceedings, which has been raised in this writ petition and the Assessing Officer to consider the same in accordance with law.

( Md. Nizamuddin, J. )