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2022 (10) TMI 36 - HC - Income TaxValidity of Reopening of assessment u/s 147 - order passed u/s 148A - as contented primary condition u/s 149 to issue a notice is not satisfied, as the AO was not in possession of books of account or other documents to find out the income chargeable to tax, escaped the assessment amounts or that the amount is likely to cross Rs.50,00,000/-. - whether the Order passed under Clause (d) of Section 148A warrants interference? - HELD THAT - It may be true that, the Petitioner would be having number of opportunities to explain his stand in the proceedings to be initiated under Section 148 of the Act, i.e., after filing of the assessment, but the argument of the learned Counsel for the Petitioner that the Petitioner could not be put to such a ordeal, at this stage, more so, when the Order came to be passed without verifying the records, cannot also be brushed aside. The issue is fortified by the fact that, in respect of information furnished under CIB, the Petitioner was able to explain the deposits made in the assessment year 2015-16, which tallied with the figures mentioned in the notice. The Order under challenge is set-aside and the matter is remanded back to the first Respondent with a direction that a fresh notice be given, disclosing the details of the second bank account if any with Andhra Bank or in any branch of Andhra Bank, where cash deposits are made within a period of one week or 10 days from the date of receipt of the Order, fixing a time limit for reply and, thereafter, proceed further in accordance with law. It is needless to mention that an opportunity of hearing be given, if requested.
Issues involved:
Challenge to the Order under Clause (d) of Section 148A of Income Tax Act, 1961 based on various procedural and substantive grounds. Analysis: Issue 1: Compliance with Section 149 of the Act - The Petitioner argues that the Assessing Officer lacked the necessary documents to establish the income chargeable to tax or the likelihood of it exceeding Rs.50,00,000. - The Counsel emphasizes the requirement of proper verification under Section 148A(b) and (d) through sources like CIB and AIR, highlighting the importance of not treating verification as a mere formality. - The Petitioner raised objections under Section 148A(c), asserting the duty of the Respondent to verify and consider the objections objectively, which the Authority allegedly failed to do. Issue 2: Merits of the Case - The Petitioner contests the information received by the Department, alleging duplication of deposits under different heads, leading to an inflated amount. - Lack of specific details in the notice regarding the bank branch and account number where the alleged deposits were made is highlighted by the Petitioner. - The Counsel argues that the Order is illegal and that the Petitioner's explanation and evidence were not adequately considered before issuing the impugned order. Issue 3: Respondent's Defense - The Respondent contends that since the assessment is pending, the Petitioner will have further opportunities to present their case, justifying the continuation of proceedings. - Emphasis is placed on the requirement of prima facie material for reopening a case, rather than the sufficiency or correctness of the material at the initial stage. Judgment - The Court examines the notice issued under Clause (d) of Section 148A, noting discrepancies in the information provided and the Petitioner's response. - Considering the lack of specific details and verification lapses, the Court sets aside the Order and remands the matter to the first Respondent for issuing a fresh notice with detailed information on any additional bank account within a specified timeframe. - The Court directs the Respondent to provide an opportunity for the Petitioner to respond and proceed in accordance with the law. - The Writ Petition is disposed of with no costs, and pending interlocutory applications are closed. This detailed analysis of the judgment highlights the procedural and substantive aspects considered by the Court in addressing the challenges raised by the Petitioner against the Order under Clause (d) of Section 148A of the Income Tax Act, 1961.
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