2023 (2) TMI 464 - HC - Income Tax

Reopening of assessment u/s 147 - order passed u/s 148A(d) - petitioner had to be granted a minimum of seven days to respond to the notice issued under Section 148A(b) - HELD THAT - Given the fact, that it is completely unclear, at this juncture, as to whether any information was received by the AO which was then furnished to the petitioner, the matter, according to us, would require reconsideration on both counts, based on which the petitioner has approached this Court. Accordingly, the best way forward, in our opinion, would be to set aside the order passed under Section 148A(d) of the Act and the consequent notice issued u/s 148 of the Act.

Summary

Issues:
Challenging notice under Section 148A(b) of the Income Tax Act, 1961 and subsequent order under Section 148A(d) and notice under Section 148 of the Act for Assessment Year 2018-2019.

Analysis:
The petition challenges a notice dated 22.03.2022 issued under Section 148A(b) of the Income Tax Act, 1961, along with an order dated 30.03.2022 under Section 148A(d) and a consequential notice issued on the same date under Section 148 of the Act for Assessment Year 2018-2019. The petitioner raised two main grievances: first, the failure to grant the statutory seven days' timeframe to file a reply as required by the notice, and second, the non-furnishing of material available with the Assessing Officer (AO) passed on by the Investigation Wing to the petitioner. The petitioner denied entering into transactions with specific entities mentioned in the allegations. The AO noted this denial but failed to provide any information to the petitioner. The respondent relied on the impugned order under Section 148A(d) to oppose the petition, acknowledging the necessity of granting a minimum of seven days to respond to the initial notice. However, due to the lack of clarity regarding the information received by the AO and furnished to the petitioner, the court deemed it necessary to set aside the order under Section 148A(d) and the consequent notice under Section 148 of the Act.

The court directed a de novo hearing by the AO, emphasizing the requirement to furnish the information/material received from the Investigation Wing, citing a Supreme Court judgment. The AO was instructed to grant a hearing to the petitioner's authorized representative, with the option to conduct proceedings via video-conferencing. It was mandated that the AO must pass a speaking order and provide a copy to the petitioner. The petitioner was granted the liberty to seek appropriate legal remedies if an adverse order was passed. The writ petition was disposed of accordingly, with pending applications to be closed.