TMI Blog2023 (8) TMI 683X X X X Extracts X X X X X X X X Extracts X X X X ..... power u/s 148 is not exercised as a matter of course or without application of mind. Thus, the inquiry contemplated by Section 148A(b) is not a detailed or full-scale one, but is merely meant to offer reasonable opportunity of being heard to the assessee to avoid casual re-opening assessment u/s 148. It may not be out of place to mention that the show-cause notice u/s 148A(b) ought to be pregnant with concise and precise information revealing the information about foundational material which persuaded the AO to come to a tentative finding that certain income has escaped assessment. In the conspectus of aforesaid discussions, it is obvious that petitioner/assessee is not entitled to the material/evidence (oral/documentary) which are the foundation of the opinion formed by the Assessing Officer so long as a show-cause notice mentions about such foundational evidence/material and the supportive reasons to form the said opinion. It is obvious from the show-cause notice u/s 148A(b) that it is accompanied by annexure which informs the petitioner/assessee of the reasons and information which persuaded the Assessing Officer to form the tentative opinion that income pertaining to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was afforded by way of issuance of notice by the Revenue and obtaining reply of petitioner/assessee. However, the grievance is that information/evidence categorized as foundational material is not sufficient to suggest that any income chargeable to tax has escaped assessment with regard to the assessment year 2016-17. Thus the very nature and character of this information/evidence is questioned by petitioner/assessee. 4.1 The decision of the Co-ordinate Bench in the Principal Commissioner of Income Tax -I (supra) may not be of assistance to petitioner since it does not relate to Section 148A which was inserted in the Income Tax Act w.e.f. 01.04.2021. As regards decision of the Supreme Court in Red Chilli International Sales (supra), it is seen that the Division Bench of High Court of Punjab Haryana had dismissed similar petition u/A. 226/227 of the Constitution filed by petitioner/assessee therein by refusing to interfere in the order passed u/S 148A(d) on the ground that since proceedings are yet to be concluded, interference ought to be avoided at premature stage, especially in the absence of any jurisdictional error and in the face of alternative statutory remedy of rectifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uential notice u/S 148 of IT Act needs to be considered on the anvil of the grounds raised in this petition and also on the anvil of foundational prerequisites u/S 148A justifying issuance of an order u/S 148A (d) followed by notice u/S 148. 5.2 Section 148A was inserted in the IT Act by Finance Act, 2021 dated 01.04.2021, primarily to give effect to the ratio laid down by Apex Court in GKN Driveshafts (India) Ltd. Vs. Income Tax Officer and others, 2003 (1) SCC 72 which inter alia held thus: 5. We see no justifiable reason to interfere with the order under challenge. However, we clarify that when a notice under Section 148 of the Income Tax 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 notices. The assessing officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the noticee is entitled to file objections to issuance of notice and the assessing officer is bound to dispose of the same by passing a speaking order. In the instant case, as the reasons have been disclosed in these proceedings, the assessing officer has to dispose of the objections, if filed, by passing a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uiry includes within its ambit, the obligation of the Assessing Officer to supply reasons which are suggestive of a prima facie case revealing income chargeable to tax having escaped assessment. 6.4 Pertinently, the statute [See 148A(b)] does not oblige the Assessing Officer to supply the relevant material/evidence which are the foundation for the Assessing Officer to come to the prima facie view that income chargeable to tax has escaped assessment. This is because neither in the judgment of the Apex Court in the case of GKN Driveshafts (India) Ltd. (supra) nor in Section 148A any such indication can be gathered. 6.5 The only duty cast upon the Assessing Officer is to supply information by mentioning the same in the show-cause notice issued u/S 148A(b) of IT Act. 7. This Court has culled out the foundational prerequisite of Section 148A, as aforesaid, to emphasize that if the inquiry contemplated in Section 148A is interpreted to mean a detailed inquiry where both sides can seek and adduce evidence/material (documentary/ocular), then the entire object behind Section 148A would stand defeated. 7.1 The object behind Section 148A as is evident from the findings in the foun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ima facie view suggestive of a case where income chargeable to tax has escaped assessment. 8.2 This Court would be failing in its duty by not dealing with the aspect that the concept of reasonable opportunity which can reasonably be implied from textual interpretation of Section 148A(b) of IT Act (of supply of adverse material) is available to the assessee/petitioner or not. It needs to be tested on the anvil of the trite law that taxing statute is to be strictly construed solely on the plain language employed. 8.3 No doubt, the concept of reasonable opportunity ostensibly appears to be inherent in the inquiry contemplated u/S 148A. However, it has to be seen whether this concept can be stretched to the extent of supplying of material/evidence in support of the opinion of Assessing Officer that certain income has escaped assessment. 8.4 No doubt, the concept of reasonable opportunity in non-taxing statutes is applied to it's fullest (including supply of adverse material) irrespective of presence of any express provision or not in cases where the authority concerned passes order entailing civil consequences of adverse nature. 8.5 Pertinently, the law of interpretation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtunity of being heard to the assessee to avoid casual re- opening assessment u/S 148. 9.3 It may not be out of place to mention that the show-cause notice u/S 148A(b) ought to be pregnant with concise and precise information revealing the information about foundational material which persuaded the Assessing Officer to come to a tentative finding that certain income has escaped assessment. 9.4 In the conspectus of aforesaid discussions, it is obvious that petitioner/assessee is not entitled to the material/evidence (oral/documentary) which are the foundation of the opinion formed by the Assessing Officer so long as a show-cause notice mentions about such foundational evidence/material and the supportive reasons to form the said opinion. 9.5 From the fact of the case, it is obvious from the show-cause notice u/S 148A(b) vide Annexure-P/3 that it is accompanied by annexure which informs the petitioner/assessee of the reasons and information which persuaded the Assessing Officer to form the tentative opinion that income pertaining to assessment year 2016-17 has escaped assessment. Moreso, the petitioner/assessee has also filed a detailed reply (Annexure-P/4) to the said notic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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