2024 (11) TMI 1322 - HC - Income Tax

Order passed u/s 148 (d) in respect of the issue which was not the subject matter of the two show cause notices - violation of provisions contemplated under Section 148 A (b) and also violation of principles of natural justice - Since the respondent was completely silent about the information available with them with regard to the search conducted with the Political Party, in relation to the donation receipt issued by the petitioner for a sum to political party, therefore, the impugned order/notice are liable to be set aside. HELD THAT - This Court is not inclined to accept the contention of the petitioner for the reason that, the petitioner submitted replies to show cause notices, annexing certain documents and the respondent, after going through those replies and on through scrutiny of the documents, found some irregularities with regard to the genuineness of such documents, hence, they conducted a investigation and gathered certain informations, based on which, an order was passed u/s 148A (d) of the Act. Respondent passed such an order u/s 148A (d) and issued consequential notice u/s 148 only based on the informations, which were gathered during the surprise check conducted by the Enforcement Officials, which was in relation to the document produced by the petitioner in support of his case at the time of filing reply. Further, by virtue of the notice issued u/s 148, the petitioner was directed to file returns within the specified time, therefore, the petitioner shall file returns in terms of Section 148 of the Act and if the petitioner is aggrieved by the Section 148 notice, the petitioner can very well file reply to the said notice. No merit in the contention raised by the petitioner.

Summary

Issues:
Challenge to notice/orders under Section 148 A (b) and 148 (b) for assessment year 2019-20, violation of principles of natural justice, assessment based on new information not in show cause notices.

Analysis:
The Writ Petition challenges the notice/orders issued by the respondent under Section 148 A (b) dated 30.03.2023, 148 (b) dated 31.03.2023, and the order under Section 148 (d) dated 13.04.2023 for the assessment year 2019-20. The petitioner contends that the respondent issued two show cause notices under Section 148 A (b) based on different sets of information, but the order under Section 148 (d) and subsequent notice under Section 148 were based on new information not part of the show cause notices. This is argued to violate principles of natural justice and Section 148 A (b) of the Act. The petitioner raised concerns about the lack of disclosure by the respondent regarding information from a surprise check related to a donation receipt provided by the petitioner to a political party. The respondent, however, justified the order based on new information obtained during a surprise check revealing irregularities in the documents submitted by the petitioner.

The Court noted that the petitioner was issued show cause notices under Section 148 A (b) based on specific information related to income from salary and interest. Subsequently, a second show cause notice was issued with additional information on deductions claimed under Chapter VI-A. The petitioner responded to these notices with supportive documents. The respondent then passed an order under Section 148 A (d) and issued a notice under Section 148 based on the information provided by the petitioner and additional information obtained during the investigation. The Court found that the respondent's actions were justified as they discovered irregularities in the documents submitted by the petitioner, leading to the issuance of the order and notice under Section 148.

The Court rejected the petitioner's argument that the respondent's actions violated principles of natural justice and Section 148 A (b) of the Act. It was determined that the respondent's decision was based on new information obtained during the investigation, which warranted the order under Section 148 A (d) and the consequential notice under Section 148. The Court dismissed the Writ Petition but allowed the petitioner to file returns within 30 days and reply to the notice within two weeks. No costs were awarded, and connected Miscellaneous Petitions were closed.