CUTTACK: The Orissa High Court has issued a notice to the Income Tax (IT) department on a petition filed by BJD challenging the reassessment of the party’s income for 2014-15.
The division bench of Chief Justice S Muralidhar and Justice BP Routray has fixed August 23 for further hearing on BJD’s petition. “Till the next date, no coercive action will be taken against the petitioner pursuant to the impugned notices issued on May 6 and 20, 2021”, the bench said in its order on Monday while granting two weeks’ time to the IT department to file a reply.
The notice, which the IT department had issued, sought to add Rs 8 crore to BJD’s income chargeable to income tax on the ground that the voluntary contribution amount was received from a donor (General Electoral Trust) which did not have PAN.
The petition hinges on the contention that the impugned notice under Section 148 of the Income Tax Act, 1961 for assessment year (AY) 2014-15 has been issued more than a month after the expiry of maximum permissible period of six years. The petition contended that in terms of settled legal position, this is a jurisdictional issue and unless the notice under Section 148 of the Act is issued within the time stipulated, the proceedings would stand vitiated.
Though the amendment made in 2021 to Section 149 of the Act extends the period of limitation, it is applicable only to AYs subsequent to April 1, 2021. The second issue raised by the petitioner is that under Section 148 of the Act, as amended in 2021, it is mandatory for the department to conduct an inquiry under Section 148 (A) even before issuing a notice. In the present case, this mandatory requirement has not been complied with, the petition said.