2022 (5) TMI 1434 - HC - Income Tax

Reopening of assessment u/s 147 - unexplained cash deposits - Whether assessing authority has recorded reasons to believe based on relevant materiel in his possession indicating escapement of income from Tax? - HELD THAT - In view of the law summarised by this Court on the point of issuance of jurisdictional notice and assumption of jurisdiction under Section 148 of the Act, 1961, in Uphill Farms Private Limited Vs. Union Of India and Another 2022 (5) TMI 375 - ALLAHABAD HIGH COURT the impugned notice under Section 148 of the Act, 1961 prima facie can not be said to be without jurisdiction. We have carefully considered the submissions of the learned counsel for the parties and we find that assessing authority has information about cash deposit which was not irrelevant or unfounded. Thus, the impugned jurisdictional notice under section 148 of the Income Tax Act, 1961 cannot be said to be without jurisdiction. For the reasons aforestated, we do not find any merit in this writ petition. Consequently, the writ petition is dismissed with liberty to the petitioner to challenge the impugned reassessment order in Appeal under Section 246A of the Income Tax Act, 1961, if so advised.

Summary

Issues:
Jurisdiction of assessing authority under Section 148 of the Income Tax Act, 1961.

Analysis:

The High Court heard the writ petition extensively on multiple dates. The respondent had filed a counter affidavit, stating that the Assessing Authority had information about cash deposits, including an error where the same amount was uploaded multiple times, resulting in a higher total. The court noted that the assessing authority had recorded reasons to believe in the escapement of income from tax based on the material in possession. Referring to a previous case law, the court found that the impugned notice under Section 148 of the Income Tax Act could not be said to be without jurisdiction. The petitioner was granted time to file a rejoinder affidavit, which was subsequently submitted and considered by the court.

The court carefully reviewed the submissions and concluded that the assessing authority had relevant information about a significant cash deposit, which was not baseless. Therefore, the jurisdictional notice issued under Section 148 of the Income Tax Act was deemed to be valid and within the authority of the assessing officer. As a result, the court found no merit in the writ petition and dismissed it. The petitioner was given the liberty to challenge the reassessment order dated 29.03.2022 in appeal under Section 246A of the Income Tax Act, 1961, within three weeks from the date of the order, with the condition that the appeal, if filed within the stipulated time along with a copy of the court's order, would be entertained without any objection regarding limitation.