TMI Blog2024 (1) TMI 368X X X X Extracts X X X X X X X X Extracts X X X X ..... r opinion the plain reading of Section 148A clearly suggests that the Assessing Officer is required to supply information before issuing notice under Section 148A in the prescribed manner and not the other material on the basis of which it has formed prima facie opinion that income of the assessee chargeable to tax has escaped assessment. In the present case, the Jurisdictional Authority along with notice dated 13.3.2023 under Section 148A(b) of the IT Act has supplied information available with it with the documents such as insight portal, wherein information/description has been given. In the notice dated 13.3.2023 under Section 148A(b) and the order dated 28.3.2023 under Section 148A(d) of the IT Act issued by the Assessing Officer, it is clearly mentioned that in the insight portal, the case of the petitioner is flagged on High Risk CRIU/RU PAN Case for the relevant assessment year. We are of the view that the case of the petitioner is covered by information specified in Explanation 1(i) of Section 148 of the IT Act. It is not the case of the petitioner that information disclosed vide notice under Section 148A(b) of the IT Act is not covered by the information specified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Portal is also attached. 5. In response to the above notice, the petitioner filed a detailed reply dated 17.3.2023, wherein apart from submitting his defence, he has prayed that before proceeding further in the matter, he may be provided copy of the report of the DDIT/ADIT (Inv.) and complete details and particulars of fake entities on the basis of which it has been alleged by the respondent-department that the petitioner has received bogus invoice from fake and bogus entities. 6. The Jurisdictional Authority, after considering the reply filed on behalf of the petitioner, has passed the order dated 28.3.2023 under Section 148A(d) of the IT Act and subsequently issued notice dated 28.3.2023 under Section 148 of the IT Act, which are under challenge in these writ petitions. 7. Learned counsel for the petitioner has argued that the impugned order dated 28.3.2023 under Section 148A(d) of the IT Act as well as the consequential notice dated 28.3.2023 under Section 148 of the IT Act are in contravention of the principles of natural justice and, therefore, it is prayed that the same may be declared perse illegal and void. It is further argued that the impugned order dated 28.3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d counsel for the petitioner has argued that the Division Bench of this Court in the case of Micro Marbles Private Limited Vs. Office of the Income Tax Officer (DBCWP No. 13719/2021) decided on 4.1.2023, has categorically held that the material, on which, the assessing authority has placed reliance to initiate proceedings under Section 148 of the IT Act, is required to supply to the assessee. Learned counsel has also placed reliance on the decision of Division Bench of Delhi High Court in Charu Chains and Jewels Pvt. Ltd. Vs. Assistant Commissioner of Income Tax, reported in (2023) 456 ITR 352 and submitted that the underlined information/material, which has been made basis of assessment/re-assessment proceedings, is required to be furnished to the assessee. 13. Learned counsel for the petitioner, therefore, submitted that in the present case, admittedly, the material on which, the Jurisdictional Authority has placed reliance has not been supplied to the petitioner, therefore, the order dated 28.3.2023 passed by the Jurisdictional Authority under Section 148A(d) and consequential notice dated 28.3.2023 under Section 148 of the IT Act are liable to be quashed and set asid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant assessment years. unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year: Provided further that nothing contained in the first proviso shall apply in a case where any income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment for any assessment year. Provided also that the Assessing Officer may assess or reassess such income, other than the income involving matters which are the subject matters of any appeal, reference or revision, which is chargeable to tax and has escaped assessment. Explanation 1.- Production before the Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso. Explanation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Finance Act, 2012, shall also be applicable for any assessment year beginning on or before the 1st day of April, 2012. Explanation.- For the purposes of assessment or reassessment or recomputation under this section, the Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment, and such issue comes to his notice subsequently in the course of the proceedings under this section, irrespective of the fact that the provisions of section 148A have not been complied with.] 148. Before making the assessment, reassessment or recomputation under section 147, and subject to the provisions of section 148A, the Assessing Officer shall serve on the assessee a notice, along with a copy of the order passed, if required, under clause (d) of section 148A, requiring him to furnish within a period of three months from the end of the month in which such notice is issued or such further period as may be allowed by the Assessing Officer on the basis of an application made in this regard by the assessee), a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion (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 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 Principal Commissioner or Commissioner, that any books of account or documents, seized or requisitioned under section 132 or 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, the Assessing Officer shall be deemed to have information which suggests that the income chargeable to tax has escaped assessment in the case of the assessee [where] the search is initiated or books of account, other documents or any assets are requisitioned or survey is conducted in the case of the assessee or money, bullion, jewellery or other valuable article or thing or books of ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee; 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, 24 [relate to, the assessee; or (d) the Assessing Officer has received any information under the scheme notified under section 135A pertaining to income chargeable to tax escaping assessment for any assessment year in the case of the assessee.] Explanation . For the purposes of this section, specified authority means the specified authority referred to in section 151.] 19. As per unamended Section 147 of the IT Act, the Assessing Officer could initiate assessment/reassessment proceedings only if he has reason to believe that the income chargeable to tax of an assessee has escaped assessment, however, with the amendment in Sections 147, 148 and insertion of Section 148A vide Finance Act 2021 w.e.f. 1.4.2021, the assessment/reassessment proceedings can be initiated by the Assessing Officer on receiving i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 148A(b) mandates only to supply information to the assessee and not the material, on the basis of which, the Assessing Officer has formed prima facie opinion that any chargeable income to tax has escaped assessment. 24. It is settled that the words used in the provisions of taxing statute are required to be given their plain meaning and nothing can be implied from or read in it. 25. In our opinion the plain reading of Section 148A clearly suggests that the Assessing Officer is required to supply information before issuing notice under Section 148A in the prescribed manner and not the other material on the basis of which it has formed prima facie opinion that income of the assessee chargeable to tax has escaped assessment. 26. We found support from the judgments of the High Court of Allahabad rendered in Deepak Kumar Yadav Vs. Principal Commissioner of Income Tax and Ors., reported in 2023/AHC/102834 and High Court of Madhya Pradesh in Amrit Homes Private Limited Vs. Deputy Commissioner of Income Tax and Another, reported in 2023 SCC Online MP 2359. 27. The High Court of Allahabad in Deepak Kumar s case (supra), while dealing with Section 148A of the IT Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 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 detailed procedure has been provided under Section 148 for issuance of notice whereafter the assessing authority has to determine, in the manner specified, whether income has escaped assessment and the defence of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al 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. 8. 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. v. Income Tax Officer, (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 speaking or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 13. 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. 14. 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. 15. 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. 16. The object behind Section 148A as is evident from the findings in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere income chargeable to tax has escaped assessment. 20. 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. 21. 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. 22. No doubt, the concept of reasonable opportunity in nontaxing 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. 23. Pertinently, the law of interpretation of taxing statute is at variance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l reopening assessment u/S 148. 31. 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. 32. 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. 33. 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 2016-2017 has escaped assessment. Moreso, the petitioner/assessee has also filed a detailed reply (Annexure-P/4) to the said notice. 34. From the above, it is evident that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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