Suppression of fact by the assessee leading to issuance of notice under Section 148 of the Income Tax Act by the Assessing officer 

Issue  

Writ Petition filed before the Bombay HC to challenge the notice issued by the Income Tax Department under Section 148 of the Income Tax Act, 1961 to a Corporate Debtor, calling upon it to submit a return in the prescribed form for the assessment year falling prior to the date of approval of Resolution Plan under Insolvency and Bankruptcy Code, 2016 on the ground that Respondent No. 1 – Assessing Officer had a reason to believe that the income chargeable to tax of the Corporate Debtor has escaped assessment within the meaning of Section 147 of the Income Tax Act, 1961. 

Facts  

• The Petitioner – Murli Industries Ltd., is a company registered under the Companies Act, 1956, is engaged in the business of manufacture and sale of cement. According to the Petitioner, the company had filed its return of income for the assessment year 2014 – 15 on 29.09.2014 declaring a loss of ₹ 2,80,30,74,365/-. 
• Income Tax Authorities selected the case for scrutiny and the order was passed on 27.12.2016 under Section 143(3) read with Section 144 of the Income Tax Act, 1961. 
• On 25.03.2021 the Assessing Officer has issued the notice under Section 148 of the Act, seeking to reopen the concluded assessment of the Petitioner company for the assessment year 2014 – 15. 

Findings  

Section 147 of the Income Tax Act, 1961 creates a deeming fiction of cases where the income chargeable to tax has escaped assessment. Clause (a) deals with a situation where no return of income has been furnished by the assessee although his total income exceeded maximum amount which is not chargeable to income tax. Clause (b) deals with a situation where a return of income has been furnished by the assessee but no assessment has been made and it is noticed by the Assessing Officer that the assessee has understated the income or has claimed excessive loss, deduction, allowances or relief in the return.  

In the present case, the Income Tax Department had, on 07.06.2017, raised claims to the tune of Rs. 50,23,770/-. The said claim was fully and finally settled at 4,00,000/- in terms of the Resolution Plan. The impugned notice does not disclose any reason as to why the claim raised through the impugned notice has not been included in the aforesaid claim before RP. Of course, there could be a case where the statutory authority was precluded from raising claim in the CIRP proceedings because of fault attributable to the Corporate Debtor, viz; where the assessment of previous year has been escaped because of suppression of fact by the assessee and that the suppressed fact has been noticed subsequently by the Assessing Officer leading to issuance of notice under Section 148 of the Act subsequent to approval of the Resolution Plan. 

Judgement  

This Court held that the impugned notices dated 25.03.2021 and 24.03.2021 are quashed and set aside and Petitioner is maintainable. 

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