TMI Blog2024 (2) TMI 753X X X X Extracts X X X X X X X X Extracts X X X X ..... tigating wing or other agency, brief summary of information along with relevant portion of report and details of documents relied upon is to be supplied. The decision as to if it is a fit case for issuance of notice u/s 148 is to be taken with prior approval of the specified authority, on the basis of material available on record and considering the reply filed by the assessee. The order is to be passed within one month from ending of the month when reply was filed and in case no reply was filed within one month from end of month when time to file reply expires. The proviso to Section 148A of the Act provides exception to the applicability of Section 148A of the Act. Addition on cash loan and the interest received - In the survey conducted documents were seized indicating that petitioner had advanced cash loan and interest was received by petitioner. The statement of Shri Ram Gopal Sukhal was also to this effect. On issuance of notice, the petitioner filed replies demanding copy of the material relied upon and raising objections. In the impugned order the reply was reproduced and it was concluded that the petitioner had not made argument on merits of the case hence, had nothing to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Petitioner : Mr. Prakul Khurana, Adv. with Ms. Vrinda Lakhotia, Adv. Mr. Aryan Singh Chouhan, Adv. Mr. Nilinesh Sen, Adv. For the Respondent : Mr. Anuroop Singhi, Adv. with Mr. N.S. Bhati, Adv. Mr. Aditya Khandelwal, Adv. JUDGMENT Avneesh Jhingan, J 1. This writ petition is filed seeking quashing of order dated 26.07.2022 passed under Section 148A(d) of the Income Tax Act, 1961 (for short the Act ). Further prayer is for quashing of notice dated 30.06.2021 issued under Section 148 of the Act. Facts 2. The petitioner is a Private Limited Company. For the Assessment year (for brevity AY) 2015-16, income tax return was filed on 04.11.2015 declaring NIL income. On 30.06.2021, notice under Section 148 of the Act was issued stating that there were reasons to believe that income chargeable to tax for AY 2015- 2016 had escaped assessment. After the decision of the Supreme Court dated 04.05.2022 in the case of Union of India Vs. Ashish Agarwal (2022) 444 ITR 01 (SC), notice under Section 148A(b) of the Act was issued on 30.05.2022. The petitioner responded on 11.06.2022, demanded the details and the documents. Additional objections were filed on 14.06.2022. The information reproducing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in appeal. Provisions Guidelines Section 148A [Conducting inquiry, providing opportunity before issue of notice under section 148. 148A. The Assessing Officer shall, before issuing any notice under section 148:- (a) conduct any enquiry, if required, with the prior approval of specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment; (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 which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a); (c) consider the reply of assessee furnished, if any, in response to the show-cause notice referred to in clause (b); (d) decide, on the basis of material available on record inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen approval from CCIT or DGIT (ref. Section 151(ii)) More than 3 years but upto 10 years v. Explanation 2 to section 148 of the Act provides that if a survey u/s 133A of the Act (other than under section 133A (2A)) was conducted in the case of the assessee on or after 1 April, 2021, the Assessing officer shall be deemed to have information which suggests that income chargeable to tax has escaped assessment. However, it is to clarify that the due procedure as prescribed u/s 148A needs to be followed in such cases also before issuing a notice u/s 148 of the Act. (refer proviso to section 148A). vi. The AO shall, if required, undertake enquiries on any information received/available with him which suggests that the income chargeable to tax has escaped assessment in a previous year only with the prior approval of specified authority . vii. If the result of enquiry/information available suggests that the income chargeable to tax has escaped assessment, the AO shall provide an opportunity of being heard to the assessee by issuing a show cause notice u/s 148A(b) of the Act. The said notice shall provide between 7 to 30 days' time to the assessee for submitting the reply. A template o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Whereas I have information which suggests that income chargeable to tax for the Assessment Year __________ has escaped assessment within the meaning of Section 147 of the Income Tax Act, 1961. The details of the information/enquiry conducted on which reliance is being placed, along with supporting documents, are enclosed with this notice. 2. You are required to show-cause as to why, in view of the details contained in enclosures mentioned in point number 1 above, a notice under Section 148 of the Income Tax Act, 1961 should not be issued. 3. You may submit your reply to this notice, along with supporting documents (if any) on the above mentioned issues on or before _______ electronically at www.incometax.gov.in. Guidelines for Enclosures The AO should enclose copy of all the relevant information available on which reliance is being placed, along with supporting documents (if any). In the cases where information is received from the investigation wing or any other law enforcement agency, details of letter, brief summary of information along with relevant portion of such report and details of relied upon documents may be enclosed. Such a portion as does not bear reference to the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is in the nature of a condition precedent. Introduction of section 148A of the IT Act can thus be said to be a game changer with an aim to achieve the ultimate object of simplifying the tax administration, ease compliance and reduce litigation. 6.3 But prior to preFinance Act, 2021, while reopening an assessment, the procedure of giving the reasons for reopening and an opportunity to the assessee and the decision of the objectives were required to be followed as per the judgment of this Court in the case of GKN Driveshafts (India) Ltd. (supra). 6.4 However, by way of section 148A, the procedure has now been streamlined and simplified. It provides 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 showcause notice referred to in clause (b); and (iv) decide, on the basis of material av ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upra) on 01/08/2022 issued guidelines for issuance of notice under Section 148 of the Act. 11. From the language of Section 148A of the Act and the guidelines, it is clear that before initiating the proceedings under Section 148 of the Act, with prior approval of the specified authority, the A.O. if so, required may conduct an enquiry with regard to the information suggesting escaped assessment. The assessee is to be provided an opportunity of hearing by issuing notice specifying the date of not less than 7 days but not exceeding 30 days, which may be extended on application. The information relied upon for reassessment and outcome of enquiry if conducted any, is to be supplied. In case of information having been received from investigating wing or other agency, brief summary of information along with relevant portion of report and details of documents relied upon is to be supplied. The decision as to if it is a fit case for issuance of notice under Section 148 is to be taken with prior approval of the specified authority, on the basis of material available on record and considering the reply filed by the assessee. The order is to be passed within one month from ending of the month ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vailable. Reference be made to Whirlpool Corporation Vs. Registrar of Trade Marks, (1998) SCC 1 wherein the Supreme Court provided at least three contingencies where the writ petition can be entertained in spite of alternative remedy. (i) Where it is a case of enforcement of fundamental rights, (ii) Where it is the case of violation of principle of natural justice and lastly, (iii) Where the proceedings are without jurisdiction or vires are challenged. 17. The reliance placed by the counsel for the respondent on the decisions of Bhagchand Dinga and Ram Kishore Kadal (supra) is of no avail. The writ petitions were filed in those cases after passing of the reassessment order or just a day before when it was passed and the petitioner participated in proceedings. In the present case, the challenge to the initiation of proceedings was subjudice before this Court and during the pendency, the order under Section 147 of the Act was passed. 18. In view of the above discussion, the impugned order dated 26.07.2022 is quashed, resultantly, the consequential proceedings. The matter is remitted back to respondent to proceed with notice under Section 148-A(b) in accordance with law. 19. The writ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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