Your Re-Assessment Notice: Why It's Crucial for Tax Officers to Detail Their Identity

When you're navigating the complexities of tax re-assessments, every detail matters. The recent case involving Jindal Exports and Imports Private Limited is a testament to this.

Jindal Exports found itself in a legal tangle when a re-assessment order, issued under Section 148A(b) of the Income Tax Act, omitted the name and designation of the issuing officer. This might seem like a minor oversight, but it's a clear violation of Section 282A of the Act.

The Delhi High Court, in its analysis, highlighted the importance of the CBDT instructions.

According to CBDT guidelines, notices under Section 148A(b) of the Act should be mailed by a specific date, in this case, 03.06.2022. Any deviation from this timeline undermines the legality of the orders under Section 148A(d) of the Act. In Jindal's case, the tax officer mailed the notices after the stipulated date, further complicating matters.

But there's more.

The notices also failed to mention the name and designation of the concerned officer issuing them. This omission doesn't just go against the CBDT instructions, but also violates Section 282A of the Act.

The court, drawing parallels with a similar case, LSR Medical Pvt. Ltd. vs DCIT Circle 13(1) & Anr, decided to set aside the notices.

So, what does this mean for you?

It underscores the importance of procedural correctness in tax matters. Whether you're a taxpayer or a tax professional, it's crucial to ensure that every document, every notice, adheres to the letter of the law.

After all, as this case shows, even seemingly minor oversights can have significant legal implications. Always be thorough, always be vigilant, and always ensure that your tax matters are in order.

Court Name : Delhi High Court

Parties : Jindal Exports And Imports Private Limited Vs DCIT 

Decision Date : 26 July 2023

Judgement ref : W.P.(C) 6217/2023

GIRISH KATHPALIA, J.:

1. The factual matrix being similar and legal matrix being same, these

four writ petitions are taken up together for disposal. We heard learned

counsel for both sides and examined the relevant legal position.

2. In these writ petitions, the petitioners have assailed legality of notice

under Section 148A(b) of the Act and orders under Section 148A(d) of the

Act on multiple grounds. However, the petitions can be disposed of on one

of those grounds without traversing through the remaining.

3. For convenient reference, the relevant dates and particulars of these

writ petitions are tabulated below:

4. One of the grounds on which these writ petitions can be disposed of is

as follows. According to the petitioners, notices dated 02.06.2022 under

Section 148A(b) of the Act, which were mailed to the petitioners on

08.06.2022 had lost efficacy after 03.06.2022, therefore, the notices as well as the consequent orders under Section 148A(d) of the Act are liable to be set aside.

5. On the issue of time limits, it would be apposite to traverse through

the clarificatory Instruction No. 1/2022 dated 11.05.2022, issued by Central

Board of Direct Taxes (CBDT) consequent to the judgment of the Hon’ble

Supreme Court in the case of Union of India vs Ashish Aggarwal, 2022(5)

TMI 240 SC relevant portions whereof are extracted hereafter:

“7.0 Cases where the Assessing Officer is required to provide the

information and material relied upon within 30 days:

7.1 Hon'ble Supreme Court has directed that information and

material is required to be provided in all cases within 30 days. However,

it has also been noticed that notices cannot be issued in a case for AY

2013-14, AY 2014-15 and AY 2015-16 if the income escaping assessment,

in that case for that year, amounts to or is likely to amount to less than

fifty lakh rupees. Hence, in order to reduce the compliance burden of

assessees, it is clarified that information and material may not be

provided in a case for AY 2013-14, AY 2014-15 and AY 2015-16, if the

income escaping assessment, in that case for that year, amounts to or is

likely to amount to less than fifty lakh rupees. Separate instruction shall

be issued regarding procedure for disposing these cases.

8.0 Procedure required to be followed by the Assessing Officers to

comply with the Supreme Court judgment:

8.1 The procedure required to be followed by the Jurisdictional

Assessing Officer/Assessing Officer, in compliance with the order of the

Hon'ble Supreme Court, is as under:

• The extended reassessment notices are deemed to be show cause

notices under clause (b) of section 148A of the Act in accordance with

the judgment of Hon'ble Supreme Court. Therefore, all requirement of

new law prior to that show cause notice shall be deemed to have been

complied with.

• The Assessing Officer shall exclude cases as per clarification in

paragraph 7.1 above.

• Within 30 days i.e, by 2nd June 2022, the Assessing Officer shall

provide to the assessees, in remaining cases, the information and

material relied upon for issuance of extended reassessment notices.

• The assessee has two weeks to reply as to why a notice under section

148 of the Act should not be issued, on the basis of information which

suggests that income chargeable to tax has escaped assessment in his

case for the relevant assessment year. The time period of two weeks shall

be counted from the date of last communication of information and

material by the Assessing Officer to the assessee.

• In view of the observation of Hon'ble Supreme Court that all the

defences of the new law are available to the assessee, if assessee makes a

request by making an application that more time be given to him to file

reply to the show cause notice, then such a request shall be considered

by the Assessing Officer on merit and time may be extended by the

Assessing Officer as provided in clause (b) of new section 148A of the

Act.

• After receiving the reply, the Assessing Officer shall decide on the

basis of material available on record including reply of the assessee,

whether or not it is a fit case to issue a notice under section 148 of the

Act. The Assessing Officer is required to pass an order under clause (d)

of section 148A of the Act to that effect, with the prior approval of the

specified authority of the new law. This order is required to be passed

within one month from the end of the month in which the reply is received

by him from the assessee. In case no such reply is furnished by the

assessee, then the order is required to be passed within one month from

the end of the month in which time or extended time allowed to furnish a

reply expires.

• If it is a fit case to issue a notice under section 148 of the Act, the

Assessing Officer shall serve on the assessee a notice under section 148

after obtaining the approval of the specified authority under section 151

of the new law. The copy of the order passed under clause (d) of section

148A of the Act shall also be served with the notice u/s 148.

• If it is not a fit case to issue a notice under section 148 of the Act, the order passed under clause (d) of section 148A to that effect shall be

served on the assessee.”

[Emphasis is ours]

6. The impugned notices under Section 148A(b) of the Act, having been

mailed after 03.06.2022, do not just abrogate the mandate of the CBDT

instructions quoted above but also violate the provisions of Section 282A of

the Act insofar as the name and designation of the concerned officer issuing

the same find no mention in the same.

7. That being so, the notices under Section 148A(b) of the Act impugned

in these writ petitions cannot be sustained.

8. In the case of LSR Medical Pvt. Ltd. vs DCIT Circle 13(1) & Anr

WP(C) 5129/2023, decided on 24.04.2023 by a co-ordinate bench of this

court to which one of us (Rajiv Shakdher, J.) was a member allowed the writ

petition on similar grounds.

9. In view of above discussion, the notices under Section 148A(b) of the

Act and orders under Section 148A(d) of the Act, impugned in these writ

petitions are set aside and the petitions are allowed, however, granting

liberty to the respondent/revenue to take further steps in accordance with

law.

10. Consequently, the pending applications also stand disposed of.

(GIRISH KATHPALIA)

JUDGE

(RAJIV SHAKDHER)

JUDGE

JULY 26, 2023

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IN THE HIGH COURT OF DELHI AT NEW DELHI

% Judgement reserved on: 13.07.2023

Judgement pronounced on : 26.07.2023

+ W.P.(C) 6217/2023 & CM APPL. 24446/2023

JINDAL EXPORTS AND IMPORTS PRIVATE LIMITED ..... Petitioner

Through: Mr Ved Jain & Mr Nischay Kantoor,

Advocates.

versus

DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 13(1),DELHI & ORS.

..... Respondents

Through: Mr Gaurav Gupta, Sr. Standing Counsel

with Mr Shivendra Singh & Mr Puneet

Singhal, Standing Counsels.

+ W.P.(C) 6891/2023 & CM APPL. 26869/2023

KIRAN CREDITS PRIVATE LIMITED ..... Petitioner

Through: Mr Ved Jain & Mr Nischay Kantoor,

Advocates.

versus

DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 13(1),DELHI & ORS.

..... Respondents

Through: Mr Gaurav Gupta, Sr. Standing Counsel

with Mr Shivendra Singh & Mr Puneet

Singhal, Standing Counsels

+ W.P.(C) 6884/2023 & CM APPL. 26860/2023

KIRAN CREDITS PRIVATE LIMITED ..... Petitioner

Through: Mr Ved Jain & Mr Nischay Kantoor,

Advocates.

versus

DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 13(1),DELHI & ORS.

..... Respondents

Through: Mr Gaurav Gupta, Sr. Standing Counsel

with Mr Shivendra Singh & Mr Puneet

Singhal, Standing Counsels

+ W.P.(C) 6183/2023&CM APPL. 24310/2023

JINDAL EXPORTS AND IMPORTS PVT. LTD. ..... Petitioner

Through: Mr Ved Jain & Mr Nischay Kantoor,

Advocates.

W.P.(C) 6217/2023, 6891/2023, 6884/2023 & 6183/2023 Page 2 of 5

versus

DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 13(1),DELHI & ORS.

..... Respondents

Through: Mr Gaurav Gupta, Sr. Standing Counsel

with Mr Shivendra Singh & Mr Puneet

Singhal, Standing Counsels.

CORAM:

HON'BLE MR. JUSTICE RAJIV SHAKDHER

HON'BLE MR. JUSTICE GIRISH KATHPALIA