No Notice for Reopening Of Assessment without Furnishing Information

No Notice for Reopening Of Assessment without Furnishing Information

The High Court of Calcutta, through its judgement in the case of Maharaja Edifice (P.) Ltd. v. Union of India dated 12th July 2022 held that issuing a notice for reopening of assessment u/s 148A of IT Act 1961 without furnishing complete information to the assessee is a violation of natural principles of justice. The article discusses the relevant facts of the case along with the judgement pronounced by the Hon’ble Court.

What Is Section 148A Of The IT Act?  

Section 148 had been inserted in the Income Tax act 1961 through the Finance Act 2021, which came into effect from 1st April 2021. The section deals with conducting the inquiry with prior approval of the appropriate authority, providing an opportunity of being heard to the appellant by issuing a notice containing the information in respect of escaping from the income chargeable to tax for the relevant assessment year, providing the time of at least 7 days but not more than 30 days to the assessee for filing the reply, considering the reply of the assessee to such notice and finally deciding upon the information so received or collected whether to issue a notice u/s 148 of the ITA Act 1961

The judgement specifically deals with the Section 148A(b) of the IT Act 1961[1], which deals with the issue of a notice containing information about escaping from the income chargeable to tax for the relevant AY 

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Facts of the Case

The appellant challenged the assessment order dated 7th April 2022 as per the provision of the ITA 1961 for AY 2018-19 through the writ petition 9856/2022. The assessment order was challenged on the ground of the order being violative of the principles of natural justice.

The AO had issued a notice dated 16th March 2022 u/s 148A( b ) of the IT Act stating about having some information that suggests that the taxable income for the relevant AY has escaped the assessment in accordance with sec- 147 of the Act.

Issue Raised In the Case

Whether a notice issued u/s 148A of the IT Act devoid of information that suggests escaping of income chargeable to tax for the relevant assessment year be enforced

Submissions of the Appellant

The notice further stated the enclosure of the details of information as well as the enquiry conducted, if any, in Annexure A. However, on the receipt of the notice, there wasn’t any enclosure as Annexure A, resulting in the assessee submitting the response through e proceedings on 21st March 2022 along with pointing out about the non-furnishing of the requisite annexure as mentioned by the AO in the notice.

No reply was given by the AO in respect of the same. However, the officer issued another notice u/s 148A(b) dated 21st March 2022.  

Submissions of the Respondent

 The counsel for the respondents submitted that the second notice was issued to the assessee due to the fact that the previous notice has not provided the minimum time of 7 days but only five days which led to the issue of the second notice by the Assessing Officer.

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Regarding the issue of the absence of Annexure A, it was submitted that the annexure contained information available with the Department. Although Annexure A did not have any information but the same was titled as case-related information detail, this being a tabular statement. The assessee, upon receiving the same, filed their response through e-proceedings dated 24th March 2022, together with attaching various documents for the same along with the response, after which the AO passed the order. 


The fact that the information, which ran for 7 paragraphs, was not furnished to the assessee in the first notice and only consisted of the details of the case was considered an utter surprise by the assessee and the court.

The court was convinced about the violation of the principle of natural justice as the appellant was not furnished with the complete information regarding which the assessment order was sought to be reopened, thereby allowing the writ petition of the appellant.

The order under 148A (d) of the Act dated 7th April 2022 was set aside, followed by the matter being remanded to the AO to the position when he issued a notice u/s 148A( b) of the Act dated 21st March 2022

Further, the assessee was directed to note the information as mentioned in the notice dated 7th April 2022 passed as per section 148A (d) of the Act and form it as a basis for reopening the case and submit the reply of the same within 10 days from the date of receiving the server copy of the order of this Hon’ble Court, and upon the receipt of the affidavit of opposition, the Assessing Officer shall be allowed to proceed further towards completing the assessment as per the prescribed law.

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Consequently, the notice issued u/s 148A of the IT Act dated 7th April 2022 was prohibited from being enforced. The assessee was expected to cooperate with the assessment proceeding together with complying with the directions of the Court within the timeline fixed by the same thereby resulting in the disposal of the application of the appellant.


This judgement provides the much-needed clarifications regarding Section 148A(b)  along with upholding the importance of principles of natural justice irrespective of the nature of the proceedings and proves the vigilance of the Indian judicial system towards the procedures prescribed by the law.


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