CUTTACK: The Orissa high court has imposed restriction on the notice that the income tax department had issued to the BJD for reopening of the assessment of the party’s income for 2014-15.
The notice had sought to add Rs 8 crore to the BJD’s income chargeable under income tax on the ground that the voluntary contribution amount was received from a donor (general electoral trust) who did not have PAN.
The BJD had challenged the notice issued under Section 148 of the IT Act on May 6 and May 20. When the petition came up on Monday, the BJD’s counsel submitted that the income tax department had served the notice more than a month after the expiry of the maximum permissible period of six years after the conclusion of the assessment year (2014-15).
The party’s counsel also submitted that the mandatory requirement of conducting an enquiry before issuing a notice for reassessment had not been complied with.
While issuing the notice to the income tax department, the two-judge bench of Chief Justice S Muralidhar and Justice B P Routray said, “Until the next date (August 23), no coercive action will be taken against the petitioner (Biju Janata Dal) pursuant to the impugned notices dated May 6, 2021 and May 20, 2021.”
The bench granted two weeks to the IT department to file a reply.
According to the copy of the order, the BJD’s counsel submitted that in terms of the settled legal position, this is a jurisdictional matter and unless the notice under Section 148 of the Act is issued within the time stipulated, the entire proceedings stand vitiated.
Attention was also drawn to the amendment made in 2021 to Section 149 of the Act which seemingly extended the period of limitation. However, this amendment would apply only to assessment years subsequent to April 1, 2021, it was submitted.
The second issue raised by the BJD’s counsel was that under Section 148 of the Act, as amended in 2021, it is mandatory for the department to conduct an enquiry under Section 148A of the Act even before issuing a notice under Section 148 of the Act. But in the present case, this mandatory requirement has not been complied with.
