Before issuing Notice U/s 148 – CBDT Caution instructions after Rs. 50 Lakh fine order by Allahabad High Court


Before issuing Notice U/s 148 – CBDT Caution instructions after Rs. 50 Lakh fine order by Allahabad High Court


Consequent to order passed by Allahabad High Court passing severe strictures and proposing to levy exemplary cost of Rs 50 lakhs in a writ challenging reopening of assessment on wrong facts , CBDT today ( 22nd August,2022 ) has issued instructions to all its officers that for initiating proceedings under Section 148/147 of the Act,any


information available on data-base/portal of the Department should be verified before drawing any adverse inference against the taxpayers.  The instructions further states that “It is not out of place to mention here that the


information made available/data uploaded by the reporting entities may not be fully accurate due to inter alia, error of human nature


technical nature, etc.” This is an admission by the CBDT that the information uploaded and on the basis of which assessment have been or are proposed to be reopened by the assessing offer was /may not be correct .


Consequently CBDT has directed its officers to carry out due verification and also to give opportunity of being heard to the taxpayer before initiating proceedings under Section 148/147 of the Act.”


Further the supervisory authorities have been advised to keep an effective

supervision so as to ensure that all extant Instructions/Guidelines/Circulars/SOPs are duly followed by the


Assessing Officers in their charge.

These instructions may be good for avoiding reopening in future but doesn’t address the grievances of a large number of taxpayers in whose cases assessments have been reopened recently in the month of July,2022 on the basis of incorrect information and by arbitrarily/ blindly rejecting the explanation given in response to the show cause notice and also without giving opportunity of being heard . Accordingly, It would have been better had the CBDT, while issuing these instructions, would have also asked its officers to revisit the notices for reassessment recently issued on receiving such representation from the taxpayer. If CBDT still issues such instructions, It would save unnecessary litigations and avoid strictures likely to be passed in all such cases ,as many  taxpayers otherwise will be agitating similar issues ,as was before Allahabad High Court which led to severe strictures and exemplary cost, before various High Courts.


Instructions Dated 22.08.2022 ON ISSUE OF NOTICE US 148 (1)