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2023 (10) TMI 90 - HC - Income TaxValidity of Reopening of assessment - providing information to the Petitioner, without furnishing the material based upon which the information is provided - HELD THAT - Providing information to the Petitioner, without furnishing the material based upon which the information is provided, would render an assessee handicapped in submitting an effective reply to the show cause notice, thereby rendering the purpose and spirit of section 148A(b) of the Act totally illusive and ephemeral. The fact that the material also was required to be supplied can very well be gauged from the clear directions issued by the Supreme Court in the case of Ashish Agarwal 2022 (5) TMI 240 - SUPREME COURT . In the case at hand, the issue is not the correctness of the information based on Assessee s defense can be determined in the assessment proceedings under Section 148 of the Act; rather, in the instant case, supporting documents have not been provided to the Assessee i.e., without providing the details uploaded on the Insight portal along with the information gathered from the investigation wing and new information uploaded on insight portal has not been provided - reopening notice set aside. - AO directed to supply the RUD tot he assessee - Decided in favour of assessee.
Issues Involved:
1. Validity of the Order under Section 148A(d) of the Income Tax Act, 1961. 2. Compliance with the mandatory pre-requisite conditions under Section 148 of the Income Tax Act, 1961. 3. Provision of information and supporting documents with the notice under Section 148A(b) of the Income Tax Act, 1961. 4. Issuance of notice under Section 148 of the Income Tax Act, 1961 without following due process. Summary: Issue 1: Validity of the Order under Section 148A(d) of the Income Tax Act, 1961 The petitioner challenged the Order dated 22.03.2023 issued under Section 148A(d) of the Income Tax Act, 1961, arguing that it was passed without considering their objections and without following the criteria provided in Section 148A of the Act. The court found that the respondent department issued the notice under Section 148A(b) without conducting any enquiry and later conducted an enquiry without providing the report to the petitioner, thus violating the provisions of Section 148A. Issue 2: Compliance with the mandatory pre-requisite conditions under Section 148 of the Income Tax Act, 1961 The petitioner contended that the notice issued under Section 148 was without complying with the mandatory pre-requisite conditions. The court held that the respondent department failed to provide the necessary information and supporting documents with the notice, which is a mandatory requirement under Section 148A(b). The court emphasized that there must be material supporting the allegation of escapement of income, and mere assertions are insufficient. Issue 3: Provision of information and supporting documents with the notice under Section 148A(b) of the Income Tax Act, 1961 The petitioner argued that the notice under Section 148A(b) was issued without providing details of the information/enquiry conducted, along with supporting documents. The court found that the respondent department did not provide the required information and supporting documents, which frustrated the purpose of Section 148A(b) and restrained the petitioner from presenting their stand effectively. Issue 4: Issuance of notice under Section 148 of the Income Tax Act, 1961 without following due process The court observed that the impugned order was based on new information that was not provided to the petitioner at the time of issuing the notice under Section 148A(b). The court held that the respondent department issued the notice in haste and without conducting any enquiry, and later gathered information without disclosing it to the petitioner. Conclusion: The court quashed the impugned order dated 22.03.2023 and the subsequent notice issued under Section 148 of the Income Tax Act, 1961. The matter was remitted back to the respondent to supply all relied upon documents and pass the order strictly in accordance with the law. The application was allowed, and pending interlocutory applications were disposed of.
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