2022 (9) TMI 1110 - HC - Income Tax

Reopening of assessment u/s 147 - petitioner states that notice issued u/s 148A(d) rejecting the contentions of the Petitioner on the ground that the Petitioner had not submitted any supporting evidence to show that the alleged information was incorrect and therefore the transaction undertaken by the Petitioner remained unexplained - HELD THAT - It is not understood by this Court as to how the petitioner can prove the negative - It is pertinent to mention that no instance of any transaction between the petitioner and Mr.Naresh Manakchand Jain has been placed on record by the AO. Issue notice. Mr.Abhishek Maratha, learned counsel for the respondent-revenue accepts notice. He prays for and is permitted to obtain instructions within two weeks. List on 6th September, 2022.

Summary

Issues:
Challenge to show cause notice under Section 148A(b) of the Income Tax Act, 1961 and order under Section 148A(d) for Assessment Year 2014-15.

Analysis:
The petitioner filed a writ petition challenging the show cause notice dated 17th May, 2022 issued under Section 148A(b) of the Income Tax Act, 1961, and the order dated 29th June, 2022 issued under Section 148A(d) for the Assessment Year 2014-15. The petitioner declared an income of Rs.10,80,404/- for the relevant Assessment Year, and an intimation under Section 143(1) of the Act was issued. The show cause notice sought to reassess the income of the petitioner based on transactions worth Rs.87,60,348/- with a specific individual, alleging these to be accommodation entries that had escaped assessment. In response, the petitioner denied any dealings with the individual in question and provided details of income earned and bank statements for verification.

The impugned order dated 29th June, 2022 was issued rejecting the petitioner's contentions, stating that no supporting evidence was submitted to refute the alleged transactions. The assessing officer concluded that the transaction of Rs.87,60,348/- remained unexplained due to the lack of evidence provided by the petitioner. However, the court raised a critical point questioning how the petitioner could prove a negative, highlighting the absence of any documented instance of the alleged transaction between the petitioner and the individual mentioned in the notice.

The court found it perplexing that the burden of proof was placed on the petitioner to disprove a transaction for which no concrete evidence was presented by the assessing officer. The court issued notice to the respondent-revenue, and the respondent's counsel accepted the notice, seeking time to obtain instructions. The matter was scheduled for further hearing on 6th September, 2022.