2023 (1) TMI 417 - HC - Income Tax

Reopening of assessment u/s 147 - notice issued u/s 148A(b) states that the Petitioner had engaged in bogus sales transaction - allegation of non-application of mind while passing the order u/s 148 A (d) - HELD THAT - A perusal of the order passed u/s 148A(d) shows that the Respondent/Revenue have completely ignored the response of the Petitioner and have instead simply stated that the evidences had not been filed. We are in agreement with the Counsel for the Petitioner. Clearly, there has been non-application of mind while passing the order under Section 148 A (d) of the Act. Having regard to the fact that the reply filed had not been considered, the impugned order and the notice issued under Section 148 of the Act of even date,i.e.,23.07.2022 are set aside. The matter is remitted to the Assessing Officer for a de novo hearing.

Summary

Issues Involved:
Challenge to notice under Section 148A(b) of the Income Tax Act, 1961, order under Section 148A(d), and subsequent notice under Section 148 by the Respondent/Revenue for Assessment Year 2014-15.

Detailed Analysis:

1. Challenge to Notice under Section 148A(b):
The Writ Petition challenged the notice issued under Section 148A(b) of the Income Tax Act, 1961, alleging that the Petitioner engaged in bogus sales transactions resulting in inexplicable cash credit with another entity. The Petitioner denied the transactions and argued that the reassessment proceeding was time-barred. The Respondent/Revenue passed an order under Section 148A(d) disregarding the Petitioner's response, leading to the conclusion of unexplained credits. The Court noted the non-application of mind in passing the order and set it aside, remitting the matter for a fresh hearing by the Assessing Officer.

2. Order under Section 148A(d) and Subsequent Notice under Section 148:
The Respondent/Revenue issued an order under Section 148A(d) and a consequential notice under Section 148 regarding the alleged unexplained credits. The order stated that the Petitioner failed to provide evidence to refute the allegations of engaging in bogus transactions, leading to unexplained credits. The Court found that the Petitioner was not asked for specific evidence and that the order lacked proper consideration of the Petitioner's response. Consequently, the Court set aside the impugned order and notice, directing a de novo hearing by the Assessing Officer with a personal hearing for the Petitioner's representative.

3. Conclusion:
The Writ Petition was disposed of with directions for a fresh hearing by the Assessing Officer, emphasizing the consideration of the Petitioner's submissions. The Court highlighted the importance of proper evaluation of evidence and responses in such matters, ensuring a fair opportunity for the Petitioner to present their case. The parties were instructed to act based on the digitally signed copy of the order, bringing the case to a resolution pending further assessment proceedings.