2023 (3) TMI 367 - HC - Income Tax

Reopening of assessment - validity of order u/s 148A(d) passed without taking into consideration any of the contentions raised by the Petitioner - bogus accommodation entries from entities controlled by Mr. Himanshu Verma - Revenues states that there is information available on the insight portal from a credible source which discloses modus operandi of tax evasion - HELD THAT - As this Court finds that the information furnished to the Petitioner and the impugned order do not specify in which bank account or account number, the alleged amount have been received by the Petitioner. Though the impugned order states that the asset is represented by bogus accommodation entries in the form of bank deposits, yet no details of any such deposit have been mentioned in the impugned order. Consequently, the impugned order passed under Section 148A(d) of the Act as well as the notice issued under Section 148 of the Act both dated 22nd July, 2022, for AY 2017-18 are set aside and the matter is remanded back to the Assessing Officer for a fresh determination. This Court permits the Assessing Officer to supply additional information, if any, in his possession to the Petitioner-Assessee within four weeks.

Summary

Issues:
Challenge to order under Section 148A(d) of the Income Tax Act, 1961 and notice under Section 148 for AY 2017-18.

Analysis:
The writ petition challenged the order passed under Section 148A(d) of the Income Tax Act, 1961, and the notice issued under Section 148 for Assessment Year (AY) 2017-18. The petitioner contended that the information forming the basis for reassessment proceedings was incorrect as they had not engaged in any transactions with the mentioned entities. The respondent argued that credible information disclosed a modus operandi of tax evasion involving the petitioner. However, the court noted that the impugned order lacked specific details regarding the alleged transactions and deposits in the petitioner's accounts. Consequently, the court set aside the order and remanded the matter back to the Assessing Officer for a fresh determination. The Assessing Officer was directed to provide any additional information to the petitioner within four weeks, allowing the petitioner to respond within the same timeframe. The Assessing Officer was instructed to decide the matter within four weeks thereafter.

The court emphasized that the impugned order and notice were lacking in specificity regarding the alleged transactions and deposits in the petitioner's accounts. Despite the respondent's claims of tax evasion modus operandi, the court found insufficient details in the order to support the allegations. Therefore, the court set aside the order and notice, remanding the matter for a fresh determination by the Assessing Officer. The court granted the Assessing Officer the opportunity to provide additional information to the petitioner and allowed the petitioner to respond accordingly within specified timelines. The court stressed the importance of a thorough and lawful decision-making process by the Assessing Officer in this matter.

In conclusion, the court's decision to set aside the impugned order and notice under Section 148A(d) and 148 of the Income Tax Act for AY 2017-18 was based on the lack of specific details regarding the alleged transactions and deposits in the petitioner's accounts. The court's directions for a fresh determination by the Assessing Officer, provision of additional information, and opportunity for the petitioner to respond were aimed at ensuring a fair and just resolution in accordance with the law. The court clarified that the rights and contentions of all parties involved were left open, emphasizing the importance of a transparent and thorough assessment process.