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TMI Blog2024 (1) TMI 368X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Section 148 of the IT Act. 3. Brief facts of the case are that the petitioner is the proprietor of M/s Tirumala Enterprises and engaged in trading of marbles, stones and granite etc. The petitioner is regularly filing his income tax return and also filed income tax return for the assessment year 2019-20 on 29.10.2019 declaring total income of INR 3,13,390/-. 4. The Jurisdictional Authority issued a notice to the petitioners dated 13.3.2023 under Section 148A(b) of the IT Act to show cause why notice under Section 148 of the IT Act should not be issued in view of the information available with it. Along with the notice, an annexure has also been supplied to the petitioner, wherein information available with the respondent-department is disclosed. Along with the annexure, a photo copy of the Insight 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me, invoice number, address, GST registration etc. It is submitted that the petitioner, in his reply dated 17.3.2023, has requested for providing complete details and particulars of alleged fake entities so that he can file a detailed response to it, however, no such information was provided and the Jurisdictional Authority has passed the order dated 28.3.2023. 11. Learned counsel for the petitioner has emphasized that the Jurisdictional Authority has placed heavy reliance on the report of the DDIT/ADIT (Inv.) 1, Udaipur to the alleged bogus purchase from fake entities filed by the petitioner, but copy of the same has not been supplied to him and as such, sufficient material, on which, the Jurisdictional Authority has relied upon, has not been supplied to the petitioner. 12. Learned 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 co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns 147, 148 and 148A of the IT Act. Sections 147, 148 and 148A of the IT Act read as under : "147. 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). Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction, allowance or relief in the return; (d) where a person is found to have any asset (including financial interest in any entity) located outside India. Explanation 3.-For the purpose of assessment or reassessment 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, notwithstanding that the reasons for such issue have not been included in the reasons recorded under sub-section (2) of section 148. Explanation 4.-For the removal of doubts, it is hereby clarified that the provisions of this section, as amended by the 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 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii) 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 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 Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions 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, 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 ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer is in receipt of any information, which suggests that any income chargeable to tax has escaped assessment, he may conduct any enquiry, if required, with prior approval of specified authority and after providing opportunity of hearing to the assessee, the concerned authority can pass order whether or not it is a fit case to issue notice under Section 148 of the IT Act. 22. The "information", on the basis of which, the Assessing Officer can proceed under Section 148A of the IT Act is explained in Explanation 1 and 2 of Section 148 of the IT Act. 23. We are of the view that Section 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record including the reply of assessee decide whether or not it is a fit case to issue a notice under Section 148. 11. The scheme for reassessment of escaped income introduced vide Finance Act, 2021 provides for an opportunity to the assessee before issuance of notice under section 148 of the Act of 1961. After such notice to the assessee and 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allenge. We are, therefore, of the considered opinion that the challenge to the information, by the assessee, on the defence setup in reply to show cause notice merits no further consideration at the stage of decision under section 148A(d) of the Act." 28. The High Court of Madhya Pradesh in Amrit Homes Private Limited's case (supra), while considering Section 148A of the IT Act has held as under : "7. From the aforesaid, it is evident as day light that the present petition which is also against the order u/S 148A(d) and the consequential 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the show-cause notice contains enough information to disclose the intention of the Assessing Officer so as to afford reasonable opportunity to assessee to respond. The contents of the show-cause notice thus should be precise and concise satisfying the concept of reasonable opportunity. 12. This Court hastens to add at this juncture that this inquiry as explained above cannot be a detailed one where assessee is given opportunity of adducing evidence in support of his defence/response. However, this inquiry 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 info ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of taxing statute, it is obvious from reading of Section 148A that it does not expressly provide for supply of any material/evidence in support of the show-cause notice u/S 148A(b). Thus this Court has no hesitation to hold that statutory provision u/S 148A does not obligate the Assessing Officer to supply any material/evidence, provided the show-cause notice contains reasons disclosing the mind of the Assessing Officer of nursing the prima facie view suggestive of a case where 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/evidenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. 29. The reason for taking the aforesaid view is not far to see. 30. The insertion of Section 148A w.e.f. 01.04.2021 in the Income Tax Act is to ensure that the 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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