TMI Blog2023 (1) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... tition is allowed and the impugned order dated 31.03.2022 passed by the Respondent No.2 under Section 148A(d) is set aside with a direction to the said authority to furnish the relevant material which prompted to initiate reassessment proceedings to the petitioner within two weeks from the date of receipt of copy of this order and thereupon the petitioner shall submit his reply along with relevant material to the said authority within two weeks from the date of receipt of the material and thereupon the 2nd respondent shall consider the reply and the material if any, submitted by the petitioner and after affording an opportunity of hearing to the petitioner, pass an appropriate order u/s 148A(d) of the IT Act. - Writ Petition No.12693 of 2022 - - - Dated:- 26-12-2022 - Hon ble Sri Justice U. Durga Prasad Rao And Hon ble Sri Justice T. Mallikarjuna Rao For the Petitioner : N Vijay For the Respondent : M Kiranmayee(Sc For Income Tax) ORDER: PER HON BLE SRI JUSTICE U. DURGA PRASAD RAO The petitioner filed the present writ petition seeking writ of mandamus declaring the order dated 31.03.2022 passed under Section 148A(d) of the Income Tax Act, 1961 by the R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t satisfy the requirement of show cause notice u/s 148 Clause (b) of the Act. (c) The petitioner requested for copies of impounded material and other relevant papers. However, the Respondent No.2 without providing the documents relied upon passed the impugned order without assigning any reasons whatsoever. Hence the writ petition. 3. Respondent No.2 filed counter and contended thus: (a) A survey U/s 133A of the IT Act was conducted in the case of the petitioner on 18.03.2019 and it was noticed that the sundry debtors of Rs.11.77 Crores were shown in the case of the petitioner for the Assessment Year 2018-19 and similarly sundry debtors of Rs.5.13 Crores were shown for the Assessment Year 2018-19 in the case of M/s Kamakshi International. In the Assessment Year 2019-20, there is no business activity in both of the above two concerns. Therefore, even if assessee s stand is taken as correct that it is a common list of debtors, the total debtors in both the cases would be to Rs.16.90 Crores only. However, as per the loose papers found and impounded, the actual total debtors are of Rs.28.32 Crores. Thus the difference is Rs.11.42 Crores. Therefore, these sundry debtors shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be seen from the respective pleadings and arguments of either party, the bone of contention is with reference to the supply of the copies of the impounded material on the basis of which, the assessing authority proposes to make re-assessment on the ground that unaccounted debt amount of Rs.11.42 Crores has escaped assessment during the assessment year 2018-19. The case of respondents is that a survey U/s 133A of the IT Act was conducted on 18.03.2019 in respect of the accounts of the petitioner and some material were impounded from which it was noticed that sundry debtors of Rs.11.77 Crores were shown in the case of the petitioner for the AY 2018-19 and similarly sundry debtors of Rs.5.13 Crores were shown for the AY 2018-19 in the case of Kamakshi Internationals totaling to Rs.16.90 Crores, but from the loose papers impounded, the actual total debtors were identified as Rs.28.32 Crores meaning thereby, there were unaccounted debtors of Rs.11.42 Crores in both cases together and the same escaped the assessment. Hence a show cause notice U/s 148A(b) of the IT Act was issued on 21.03.2022 to the petitioner as mandated U/s 148A(b) of the IT Act. 7. The petitioner in his reply dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The respondents have not produced any proof positive in this regard for supply of the material. As such, we are constrained to hold that the relevant material which was said to be impounded during the course of search operation and which was the basis for the respondent authorities to embark on re-assessment was not furnished to the petitioner. Needless to emphasize, such non-furnishment of the relevant material amounts to violation of principles of natural justice. It should be noted that Section 148A was newly inserted by the Finance Act, 2021 w.e.f 01.04.2021. As can be seen, before issuing notice U/s 148 for making assessment, reassessment or re-computation, a show cause notice U/s 148A(b) has to be issued. Section 148A(b) reads thus: 148A(b). provide an opportunity of being heard to the assessee, by serving upon him a notice to show cause within such time, as may be specified in the notice, being not less than seven days and but not exceeding thirty days from the date on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice under section 148 should not be issued on the basis of information whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 escaped assessment; (ii) provide an opportunity of being heard to the Assessee, with the prior approval of specified authority; (iii) consider the reply of the Assessee furnished, if any, in response to the show-cause notice referred to in Clause (b); and (iv) decide, on the basis of material available on record including reply of the Assessee, as to whether or not it is a fit case to issue a notice Under Section 148 of the IT Act and (v) the AO is required to pass a specific order within the time stipulated. xxxx 7. Thus, the new provisions substituted by the Finance Act, 2021 being remedial and benevolent in nature and substituted with a specific aim and object to protect the rights and interest of the Assessee as well as and the same being in public interest, the respective High Courts have rightly held that the benefit of new provisions shall be made available even in respect of the proceedings relating to past assessment years, pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orded from a Director of the company on 03.01.2019 etc. If that is so, the appellant should have full information so as to enable them to give effective reply. This having not done, this Court is of the view that the principles of natural justice have been violated and the appellant should be afforded with an opportunity to put forth their contention. 13. In the light of above law and facts, the writ petition is allowed and the impugned order dated 31.03.2022 passed by the Respondent No.2 under Section 148A(d) of the Income Tax Act, 1961 is set aside with a direction to the said authority to furnish the relevant material which prompted to initiate reassessment proceedings to the petitioner within two weeks from the date of receipt of copy of this order and thereupon the petitioner shall submit his reply along with relevant material to the said authority within two weeks from the date of receipt of the material and thereupon the 2nd respondent shall consider the reply and the material if any, submitted by the petitioner and after affording an opportunity of hearing to the petitioner, pass an appropriate order U/s 148A(d) of the IT Act. No costs. As a sequel, interlocutory app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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