9911796707
TMI Blog2022 (8) TMI 1140X X X X Extracts X X X X X X X X Extracts X X X X ..... rit Court held that notices were issued to the assessee under Section 148A (b) of the Act and in response to which the assessee filed their objection and thereafter the Assessing Officer has passed the order under Clause (d) of Section 148A with elaborate discussion and reasons. Further, the learned Writ Court held that it cannot act as an appellate authority over the order impugned in the writ petition, more particularly, when there is no procedural irregularity or violation of principles of natural justice or the officer had contravened any of the statutory provisions and the reasoning and finding given by the Assessing Officer should not substituted by the Writ Court. Aggrieved by the same, the assessee is before us by way of this appeal. 2. Mr. R. K. Murarka, learned Senior Advocate appearing for the appellant submitted that the notices dated 21.03.2022 and 30.03.2022 are not notices issued under Section 148A (b) of the Act, but were notices of initial enquiry under Section 148A (a) of the Act. Further, the notices did not disclose any reasons / materials to suggest, in its Annexure "A" or otherwise that any income of the assessee had escaped assessment within the meaning and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... placed on the decision of the Hon'ble Supreme Court in Kanwar Natwar Singh and Anr. Versus Directorate of Enforcement & Anr. (2011) 330 ITR 374 (SC). Though the said decision arose out of proceedings initiated under the provisions of the Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, the decision was pressed into service for the proposition that materials are to be disclosed to the person concerned. In this regard, reference was also made to the CBDT Instruction No. 1 of 2022 dated 11th May, 2022 which states the procedure which is required to be followed by the Assessing Officer in compliance with the order passed by the Hon'ble Supreme Court in Ashish Agarwal and in the case on hand the Assessing Officer failed to follow the said procedure. In support of his contention that the order passed by the authority should be a speaking order after considering objections filed by the assessee, reliance was placed on the decision in the case of Roquette Riddhi Siddhi (P.) Ltd. Versus Deputy Commission of Income Tax Circle 3(1)(2), Ahmedabad (2021) 130 taxmann.com 237 (Gujarat). Reliance was placed on the celebrated decision in the case of Calcutta Discount Co. Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment. It is submitted that the reply dated 30.03.2022 has been considered by the Assessing Officer and well reasoned order has been passed which was rightly not interfered by the learned Writ Court and consequently the learned Writ Court was fully justified in dismissing the writ petition. Further, it is submitted that the decisions in Giridhar Gopal Dalmia and Babcock Borsig Limited are clearly distinguishable on facts and cannot be applied to the assessee's case. With the above submission, the learned Senior Standing Counsel prayed for dismissal of the appeal. 4. We have heard Mr. Ranjeet Kumar Murarka, learned Senior advocate along with Mr. Vivek Murarka and Mr. Dibanath Dey, learned Advocates for the appellant and Ms. Smita Das De, learned Advocate for the respondents. 5. The assessee filed return of income for the assessment under consideration, A.Y. 2018-19 on 31st October, 2018. An intimation under Section 143(1) of the Act was issued on 31.08.2019. Thereafter, notice under Section 143(2) of the Act was issued on 22nd September, 2019. Stating that there are certain issues which need further clarification for which the return of income filed by the assessee has been se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.70/-, we are attaching calculation of the same as separate enclose, we have earned dividend of Rs. 1,58,157/- from various shares held a stock in trade, we have not entered any expenses specifically relatable to earning of dividend income. We could have incurred same expenditure even if we have no dividend income. * We have investment of Rs. 3,95,820/- at the beginning of the year which is same the end of the year also. However, we have share held as stock in trade details of which in desired format we are attaching as separate enclose. * Since we have no expenses attributable to earning of dividend income no expenses shall be disallowed under Section 14A r.w. Rule 8D. 6. The reply submitted by the assessee was not accepted by the Assessing Officer and by order dated 07.06.2021 the assessment was completed under Section 143(3) read with Section 144B of the Act, by making a disallowance under Section 14A read with Rule 8D of the Rules. Aggrieved by such order, the assessee preferred appeal before the Commissioner of Income Tax Appeals, National Faceless Appeal Centre, Delhi. The grounds raised before the Appellate Authority are as follows: * For that the Ld. A.O. erred in n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other entity thereafter, mention the name of that person, the reasons for such payment and its present address with all supporting documents. * Please furnish names and addresses of the Directors of your company who were holding that position at the time of receipt of such money. * Please furnish statement of your Bank A/c, for the relevant period showing receipts of such money and its subsequent transfer, if applicable. You are requested to furnish you written submission on all the matters, as asked for, in detail along with all supporting documents within 07 days from the date of receipt of this communication. You are also requested to explain as to why Notice u/s 148 would not be issued in your case to reopen your assessment for the relevant year on the basis of adverse information received against you. This communication has been made on receiving prior approval from the Competent Authority. Your compliance and cooperation in this regard will be highly appreciated. 8. The assessee submitted their response dated 28.03.2022 by e-proceedings. The assessee also submitted his written reply dated 30.03.2022 to the notice issued under Clause (b) of Section 148 (A) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce there was no response from the department, the assessee filed the writ petition which has been dismissed by the impugned order. 11. As could be seen from what we have stated above, the assessee has been consistently pleading that they should be furnished with documents and information so as to ensure fair plain action. The request was to provide verbatim copy of the information suggesting escapement of income available with the assessing officer allegedly based on which the notice under Section 148A of the Act has been issued in terms of Explanation 1 to Section 148. The assessee requested for providing copies of adverse materials and adverse statements, if any based on which notice was issued. Further the assessee requested for copy of the materials gathered on the basis of enquiry, if any conducted under Clause (a) of Section 148A. The assessee requested an opportunity to cross examine the persons who might have given adverse deposition in connection with the subject matter upon which notice under Section 148A has been issued. The assessee also requested for the copy of the approval of the specified authority which had been given to the assessing officer before issuance of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion contained in the annexure and the questions posed therein is for the purpose of conducting an enquiry under Clause (a) of Section 148 (A) of the Act or is it the information based on which the notice under Clause (b) of Section 148 of the Act was issued. The first paragraph of the annexure may suggest that it is forming part of the notice under Clause (b) of Section 148A of the Act. However, on reading the other paragraphs, it leaves no doubt in our mind that what the assessing officer proposed was to conduct an enquiry in terms of Clause (a) of Section 148A of the Act. This is so because several details have been called for from the assessee and they were requested to submit their explanation with clarification and necessary information. If such is the tenor of the notice, it pre-supposes that the assessing officer was desirous of conducting an enquiry after receiving clarifications and information on the issues mentioned in Clauses (a) to (f) as contained in the annexure. Therefore, we agree with the submissions of the learned senior advocate for the assessee that the notice dated 21.03.2022 and the subsequent notice dated 30.03.2022 though purported to have been issued under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g officers have been set out. It has been stated that in view of the observation of the Hon'ble Supreme Court all defences under the new law are available to the assessee and if the assessee makes a request by making an application that more time be given to him to file the reply to the show cause notice then such a request shall be considered by the assessing officer on merit and time may be extended by the assessing officer as provided in clause (b) of Section 148A of the Act. It has been further stated that after receiving the reply, the assessing officer shall decide on the basis of materials available on record including the reply of the assessee, whether or not it is a fit case to issue notice under Section 148 of the Act. At this juncture, it would be relevant to take note of few paragraphs of the decision in Ashish Agarwal: * However, by way of Section 148A, the procedure has now been streamlined and simplified. It provides that before issuing any notice under Section 148, the assessing officer shall (i) conduct any enquiry, if required, with the approval of specified authority, with respect to the information which suggests that the income chargeable to tax has escape ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... directions and more importantly, violated the directions issued in the instructions given by the CBDT dated 11.05.2022. Admittedly, no opportunity of hearing was granted to the assessee and even assuming the assessee was heard such opportunity is of no consequence as the assessee was not provided with the full information sought for by them. This view is supported by the decision of this Court in the case of Babcock Borsig Limited Versus Union of India in MAT No. 849 of 2022 dated 21.06.2022 and the decision in Girdhar Gopal Dalmia Versus Union of India & Others in MAT No. 727 of 2022 dated 21.06.2022. 15. Mr. Muraka had also stressed the point with regard to the approval which is stated to have been granted by the competent authority. In fact, the assessee has sought for a copy of the order granting such approval, in the opinion of the assessee there is no such prior approval. 16. In Chhugamal Rajpal, the Hon'ble Supreme Court while setting aside the re-assessment proceedings also took note of the importance of the permission which was required to be granted by the Commissioner and after noting the facts therein, it was held that the Commissioner has mechanically accorded permi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hon'ble Supreme Court in GKN has to be borne in mind by the assessing officer while disposing of the objections filed by the assessee. 20. Thus, we are fully satisfied that there has been gross violation of the principles of natural justice and the assessee did not have adequate opportunity to put forth their objection in an effective manner as the information sought for by the assessee was not furnished. Further we have held that the notices dated 21.03.2022 and 30.03.2022 though purported to have been issued under Clause (b) of Section 148A, on a reading of the annexure, it is clearly seen that the annexure does not contain information but it is a questionnaire. If that is so, then it goes without saying that what was intended by the assessing officer is to conduct an enquiry after receiving information from the assessee and the notice is deemed to be a notice under Section 148A (a) of the Act. 21. Thus, there is gross procedural error from the very inception of the proceedings rendering the same as bad in law. 22. In the result, the appeal is allowed, the order passed in the writ petition is set aside. Consequently, the writ petition is allowed to the extent indicated:- ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
