2022 (6) TMI 1319 - HC - Income Tax

Reopening of assessment u/s 147 - validity of notice issued u/s 148A(b) - HELD THAT - This Court is of the view that the Revenue by asking the Petitioner-Assessee to respond to the aforesaid vague show cause notice was virtually asking the Petitioner to search for a needle in a haystack . Revenue now states that the Respondent shall supply all the relevant material documents and information in its possession, the impugned order passed u/s 149A(d) as well as the notice issued u/s 148 are set aside with a direction to the Respondent-Revenue to issue a supplementary notice in pursuance to the initial notice issued u/s 148A(b) within three weeks enclosing all the relevant/incriminating information/material/documents. The Petitioner shall file its response to the said supplementary notice within three weeks. AO is directed to pass a fresh order u/s 148A(d) in accordance with law within six weeks thereafter. With the aforesaid directions, present writ petition along with pending application stands disposed of.

Summary

Issues:
Challenge to notice under Section 148A(b) of the Income Tax Act, 1961 for Assessment Year 2015-16.

Analysis:
The writ petition challenged a notice issued under Section 148A(b) of the Income Tax Act, 1961, along with subsequent orders and notices related to the Assessment Year 2015-16. The petitioner alleged that the respondent failed to comply with the Supreme Court's direction in a specific case, making unsupported allegations. The petitioner contended that the notices lacked specific details, denying them a fair chance to respond effectively. The respondent claimed that the petitioner received accommodation entries from a specific entity, providing bank details as evidence. The court emphasized the importance of providing specific material and information in notices under Section 148A(b) to enable meaningful responses from the assessee. Citing previous judgments, the court noted that withholding crucial information violates the principles of natural justice, leaving the assessee to search for a needle in a haystack.

The court, considering the lack of details in the notices, set aside the impugned order and directed the revenue to provide all relevant material within three weeks for the petitioner to respond. The assessing officer was instructed to pass a fresh order in accordance with the law within six weeks thereafter. The court clarified that its directions did not imply any judgment on the merits of the case, leaving the rights and contentions of all parties open for further proceedings.