2023 (5) TMI 707 - HC - Income Tax

Reopening of assessment - notice to petitioner u/s 148A(b) accompanying the information with the assessing officer to suggest that income chargeable to tax has escaped assessment - HELD THAT:- Assessing authority has received information from DDIT (investigation), Unit III, Nagpur from DGGI and GST authorities as well as from CBDT that the sellers of the assessee were availing fraudulent ITC on the basis of investigation made by the concerned agencies. Such information would be information referable to clause (i) of Explanation 1 to second proviso to section 148 - We have already observed that there is no challenge to the notice by the assessee on the ground that information disclosed vide notice u/s 148A(b) is not covered by the information specified in Explanation 1 to the second proviso to section 148.

Maintainability of the writ petition against the order passed under section 148A(d) is distinct from the scope of adjudication available qua the order passed under section 148A(d) - The limited scope available under Article 226 of the Constitution of India to adjudicate an order passed under section 148A(d) of the Act, 1961 would be confined to existence of the information only, in view of the scheme of the Act of 1961. A contrary construction cannot be culled out from the judgment of the Supreme Court of India in Red Chilli International Sales [2023 (1) TMI 674 - SC ORDER]

In Anshul Jain [2022 (10) TMI 3 - SC ORDER] the Supreme Court did examine the scope of proceedings under section 148A vis-a-vis reassessment proceedings u/s 148 of the Act to observe that by the very nature of proceedings the examination would remain more exhaustive at the stage of reassessment proceedings with elaborate remedies available under the statute to the assessee.

The order passed by the AO u/s 148A(d) regarding existence of information suggesting that income chargeable to tax has escaped assessment would otherwise remain subject to reassessment order passed under section 148 - Thus, any observations of the assessing authority while passing order u/s 148A(d) with regard to merits of assessment of income would remain subject to the order to be ultimately passed in reassessment proceedings u/s 148 and would not be to the prejudice of rights and contentions of the assessee u/s 148 as well as departmental remedies in respect thereof.

We do not find any merit in the challenge laid to the order of assessing authority u/s 148A(d), as well as the notice issued u/s 148 - WP dismissed.