3 min readNew DelhiMay 30, 2023 05:10 AM IST
First published on: May 30, 2023 at 04:00 AM IST
THE DELHI HIGH Court recently stayed income tax proceedings against public policy think tank Centre for Policy Research (CPR) after it moved a plea against notices issued by the Income Tax department.
“According to us, the matter requires examination. Besides this, as noticed above, it is, at least, prima facie, evident to us that Section 149 of the (Income Tax) Act, as amended, may not be applicable… In the meanwhile, there shall be a stay on the continuation of the reassessment proceedings, till further directions of the court,” a division bench of Justices Rajiv Shakdher and Girish Kathpalia said in its May 24 order.
It issued notice to the Deputy Commissioner of Income Tax, Central Circle 14 and another respondent. The matter is listed on November 22.
Appearing for CPR, senior advocate Arvind Datar had argued that the amended Section 149 of the Act (which came into effect April 1) was applied to CPR, although the transaction related to AY (assessment year) 2016-17. Section 149(1)(b) states that no notice under Section 148 for the relevant AY can be issued if three years, but not more than 10 years, have elapsed from the end of the relevant AY, unless the Assessing Officer has evidence that income of Rs 50 lakh or more has escaped tax assessment for that year.
The I-T department said that since the reassessment proceeding was triggered following “qua the petitioner on account of a survey action, provisions of clause (ii) of Explanation 2 of Section 148 of the Act, would be applicable”. Hence, it said, the information which emerged after the survey would be deemed as information “suggesting that income chargeable to tax has escaped assessment”.
Datar contended that the respondents were “duty-bound to furnish to the petitioner (CPR) the entire survey report, as it forms the basis for triggering the reassessment proceeding”. This, he said, was a “breach of principles of natural justice”.
CPR had challenged the notices it received on March 28-29 under Section 148A(b), which provides for opportunity to be heard by issuing a show cause within a specified time period. It had also challenged an April 19 order under Section 148A(d) as well as a consequential notice of April 19 issued under Section 148 (issue of notice where income has escaped assessment). Section 148A pertains to conducting of inquiry and providing opportunity before issuance of notice under section 148.
Appearing for CPR, senior advocate Arvind Datar had argued that the amended Section 149 of the Act (which came into effect April 1) was applied to CPR, although the transaction related to AY (assessment year) 2016-17. (Express Photo) 
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