TMI Blog2022 (5) TMI 528X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee, whether or not it is a fit case to issue a notice under Section 148 by passing an order with the prior approval of the specified authority within one month from the end of the month in which the reply is received by him. Thus, there is an obligation cast upon the Assessing Officer in accordance with clause (d) of Section 148A of the Act, 1961 to consider the case not only on the basis of the materials available on record, but also the reply of the assessee. If the reply of the assessee has not been considered, then passing of the order under clause (d) of Section 148A could be said to be an empty formality. The new regime of Section 148A should be strictly followed so as to make it meaningful. The principle of law, as explained by the Supreme Court, in the case of GKN Driveshaft (India) Ltd [ 2002 (11) TMI 7 - SUPREME COURT] , is now a statutory provision in the form of new Section 148A of the Act. We are of the view that we should quash and set aside the order passed under clause (d) of Section 148A as well as the notice issued under Section 148 of the Act, 1961 and remit the matter to the Assessing Officer for fresh consideration of the objections filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsactions but, there are huge transactions so for as the Social Co-operative Bank Ltd. is concerned. Out of the three bank accounts, according to the writ applicant, one of the bank accounts maintained with the Social Cooperative Bank Ltd. is that of the HUF and the HUF is being assessed independently. Even if one of the bank accounts is that of the HUF still the question is how do we determine whether in the original return all the transactions connected with the Social Co-operative Bank Ltd. were disclosed in the return. The argument is that in the return, the assessee need not disclose anything about his bank or the bank details. In the return, he has to show the transactions, the profit and loss account etc. 3. We would like to know from both, the assessee as well as the Revenue, whether all the transactions for the relevant Assessment Year 2018-19 were with respect to only this particular bank or there are any other accounts also of the writ applicant with other banks. 4. We request Mr. Bhatt, the learned Senior Counsel, to seek appropriate instructions in this matter and revert to us on 02.05.2022. 5. Post this matter on 02.05.2022. 6. One set of the entir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o tax amounting to Rs.1,80,41,71,133/- has escaped assessment in your case for A. Y. 2018-19. 5. To the aforesaid, the writ applicant filed a detailed reply in the form of his objections under clause (b) of Section 148A, wherein the writ applicant pointed out the following: 1.1 The assessee vehemently objects to above re-opening which is based on incorrect facts and observations. It is submitted that all transactions in bank accounts referred in the notice by your good self belong to assessee (except one which is discussed in detail hereunder) and related to its business and the same have been duly recorded in audited books of account and effect has been given in the return of income filed by the assesse as well. The contention of assesse is explained in detail hereunder. 2. Transactions of Rs.66,75,36,803/- carried out in the bank account with the Social Co-operative Bank Ltd. in account no. 130002016000456 do not belong to the assesse 2.1 Before dealing with the facts and other details of the present case, it is pertinent to mention that out various bank accounts referred by your good self, one of the bank accounts with The Social Cooperative Bank Ltd. in A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs, receipt of unsecured loan, etc which are related to business operation and duly recorded in books of account and debit in bank account includes payment to suppliers for goods and repayment of unsecured loans, etc which are also recorded in audited books of accounts. Copy of annual accounts along with tax audit report is enclosed as Annexure-4 which is audited by independent chartered accountant which proves that all transactions are verified and reported in annual accounts. Hence argument that transactions executed in bank account is not reflected in return of income is incorrect and proceedings cannot be reopened on the basis of same. In order to explain the details of above transaction, the assesse hereby encloses explanation of all transactions executed in above bank account vide Annexure-5 wherein details of transactions are mentioned. 6. While passing the final order under clause (d) of Section 148A of the Act, 1961, all that the Assessing Officer has stated in paras 7 and 8 reply is as under: 7. The submission filed by the assessee has been duly considered and the same is not found acceptable. Having considered the submission of the assessee, it is found that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a); (c) consider the reply of assessee furnished, if any, in response to the show-cause notice referred to in clause (b); (d) decide, on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under section 148, by passing an order, with the prior approval of specified authority, within one month from the end of the month in which the reply referred to in clause (c) is received by him, or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply as per clause (b) expires: Provided that the provisions of this section shall not apply in a case where,- (a) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A in the case of the assessee on or after the 1st day of April, 2021; or (b) the Assessing Officer is satisfied, with the prior approval of the Pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... take notice of the fact that, while disposing the objections, the AO has concluded that the objections made by the assessee are duly considered and not acceptable. In para-4 of the order, the AO has observed that the transactions made by the assessee company with Rashmi Diamond were bogus entries and the fact of difference in respect of credit entries in the bank account were not brought into knowledge of the AO during the course of assessment proceedings. We are of the view that the AO failed to take note of various objections filed against the reasons recorded. Para-4 of the order as referred to above does not reflect the proper application of mind to the objections raised by the applicant and it could not be said that the objections having been disposed of by passing reason order. In the case of GKN Driveshaft (supra), the Supreme Court has laid down the procedure as to the manner of dealing with the objections raised against the notice under Section 148 of the Act. The Supreme Court has held that when a notice under Section 148 of the Act is issued, the proper course of action for the noticee is to file return and if he so desires, to seek reasons for issuing notice. It was fu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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