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TMI Blog2023 (5) TMI 707X X X X Extracts X X X X X X X X Extracts X X X X ..... t he has been assessed under Section 143(1) of the Act on the basis of return submitted by him on 26.08.2019 and no notice has been issued to him under Section 143(2) of the Act. 2. It transpires that the jurisdictional authority i.e. respondent no. 2 issued a notice to petitioner dated 16.03.2023, under Section 148A(b) of the Act, 1961 accompanying the information with the assessing officer to suggest that income chargeable to tax has escaped assessment. The substance of the information accompanying the notice is extracted hereinafter:- "1(A) Information was received by DDIT (Inv.), Unit-III, Nagpur from DGGI and GST authorities in the case of M/s Kuhoje K Achumi of availing and utilization of fraudulent ITC on the basis of fake tax invoices without receipt of goods. The said entity did not exist at the declared principal place of business. On the basis of the above information, the Investigation Unit-III, Nagpur took up investigation and inferred that M/s Kuhoje K Achumi has facilitated and is involved in both availing of fake invoices without actual supply of goods and in turn in issuing fake invoices to others without actual supply of goods. Aforesaid facts imply that the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show cause as to why a notice under Section 148 of the Act be not issued to him on the basis of information which suggests that income chargeable to tax of Rs. 96,43,750/- + Rs. 83,25,000/- + Rs. 5,10,25,000/- aggregate Rs. 6,89,93,750/- has escaped assessment for the Assessment Year 2019-20. 4. In response to the above notice the petitioner has filed a detailed objection before the respondent no. 2 on 24.04.2023 denying the allegations made in the notice. A request has also been made for providing the information relied upon for invoking such proceedings as well as to provide opportunity of cross-examination of the said suppliers. 5. The jurisdictional authority has proceeded to pass an order on 29.3.2023 under Section 148(d) of the Act rejecting the petitioner's objection to the notice on the ground that information exists to suggest that transactions referred to in the notice are fictitious and without actual supply of goods. Consequently, petitioner's purchases are treated as fictitious for the Financial Year 2018-19 amounting to Rs. 1,79,68,750/-. This amount has been treated as having escaped assessment for the year 2019-20 for the purposes of initiating proceeding under Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbarking upon the correctness or otherwise of the information available with the Assessing Officer while taking decision under Section 148A(d) of the Act. 8. The scheme for re-assessment of tax under the Act of 1961 has undergone a change with effect from April 1, 2021 vide Finance Act, 2021. The requirement of 'reasons to believe' for initiating re5 assessment proceedings hitherto occurring in the Act stands substituted with the availability of information with the Assessing Officer that income of assessee has escaped assessment. Amended sections 147 and 148 of the Income Tax Act, 1961 as well as section 148A introduced in the Act of 1961 vide Finance Act 2021 are reproduced hereinafter:- "147. Income escaping assessment. - If any income chargeable to tax, in the case of an assessee, has escaped assessment for any assessment year, the Assessing Officer may, subject to the provisions of sections 148 to 153, assess or reassess such income or recompute the loss or the depreciation allowance or any other allowance or deduction for such assessment year (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year). Explanation. - For the purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of this Act; or (iii) any information received under an agreement referred to in section 90 or section 90A of the Act; or (iv) any information made available to the Assessing Officer under the scheme notified under section 135A; or (v) any information which requires action in consequence of the order of a Tribunal or a Court. Explanation 2. - For the purposes of this section, where,- (i) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A, on or after the 1st day of April, 2021, in the case of the assessee; or (ii) a survey is conducted under section 133A, other than under sub-section (2A) of that section, on or after the 1st day of April, 2021, in the case of the assessee; or (iii) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner, that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned under section 132 or under section 132A in case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or (iv) the Assessing Officer is satisfied, with the prior approval of Princip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me 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 Principal Commissioner or Commissioner that any money, bullion, jewellery or other valuable article or thing, seized in a search under section 132 or requisitioned under section 132A, in the case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or (c) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any books of account or documents, seized in a search under section 132 or requisitioned under section 132A, in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, [relate to, the assessee; or (d) the Assessing Officer has received any information under the scheme notified under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d consideration of reply of assessee in response to the notice the assessing authority has to decide on the basis of material available on record by passing an order under section 148A(d) whether a notice under section 148 is fit to be issued in the case. The consideration at the stage of passing order under section 148A(d) is thus limited to ascertainment of information with the Assessing Officer that income of assessee has escaped assessment to tax. Final determination on the question whether income of assessee has actually escaped assessment is then to be made after notice under section 148, by passing an order of assessment or reassessment under section 147, subject to the provisions of section 148 to 153 of the Act of 1961. 12. The Act of 1961 does not contemplate any detailed adjudication on the merits of information available with the Assessing Officer at the stage of passing order under section 148A(d) of the Act of 1961. In our considered view there is a specific purpose for not introducing any further enquiry or adjudication in the statute, on the correctness or otherwise of the information, at this stage. The reason for it is obvious. Under the scheme of the Act a detai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at information did exist with the authorities suggesting that the income chargeable to tax has escaped assessment. The formation of opinion by the authority concerned under section 148A(d), therefore, cannot be questioned on the basis of detailed defence setup by the assessee on the merits of the information, including opportunity of cross-examining the seller or by demanding the documents relating to such information. 14. It is only to the extent of availability or otherwise of information suggesting that income has escaped assessment that the scope of enquiry rests under Section 148A(d). The correctness or otherwise of information is an aspect to be gone into later by the assessing authority at the stage of proceedings under Section 148 of the Act for reassessment. Any other interpretation, in our view, is not countenanced in the scheme of the Act of 1961. 15. The information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment has been defined in Explanation 1 to the second proviso to section 148 of the Act which is already extracted above. There is no challenge to the information contained in the notice under section 148A(b) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Section 19 of the State Act. In such cases of obvious mistakes apparent on the face of the record of assessment, that record itself can be a source of information, if that information leads to a discovery or belief that there has been an escape of assessment or under-assessment or wrong assessment. 27. There are a catena of judgments of this Court holding that assessment proceedings can be reopened if the audit objection points out the factual information already available in the records and that it was overlooked or not taken into consideration. Similarly, if audit points out some information or facts available outside the record or any arithmetical mistake, assessment can be reopened. 32. The expression "information" means instruction or knowledge derived from an external source concerning facts or parties or as to law relating to and/or after bearing on the assessment. We are of the clear view that on the basis of information received and if the assessing officer is satisfied that reasonable ground exists to believe, then in that case the power of the assessing authority extends to reopening of assessment, if for any reason, the whole or any part of the turnover of the bus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the petitioner and the order under Section 148A (d) of the Income Tax Act, 1961. Recording the aforesaid, the special leave petition is disposed of. We clarify that the dismissal of the special leave petition would not be construed as a findings or observations on the merits on case." 19. On behalf of the department, Sri Gaurav Mahajan has placed reliance upon a Division Bench judgment of Punjab and Haryana High Court in Anshul Jain vs. Pr. CIT, [2022] 143 taxmann.com 37, wherein the Court observed that no interference by the writ court was warranted in the order passed under section 148A(d) of the Act as all the grounds of challenge to such order would be available to an assessee while challenging the order passed in reassessment proceedings consequent to the notice issued under section 148 of the Act, 1961. 20. The above order of Division Bench of High Court of Punjab and Haryana was challenged before the Supreme Court of India in Anshul Jain vs. Pr. CIT, [2022] 143 taxmann.com 38, wherein the Court has observed as under:- "What is challenged before the High Court was the reopening notice under Section 148A(d) of the Income Tax Act, 1961. The notices have been issued, af ..... X X X X Extracts X X X X X X X X Extracts X X X X
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