2024 (12) TMI 507 - HC - Income Tax

Reopening of assessment - validity of notice issued u/s 148 as it stood prior to 01.04.2021 on 31.03.2021 for the respective Assessment Years - petitioner has challenged the notice on the ground that the notice has been issued after 01.04.2021 and therefore without jurisdiction and ought to have been completed in accordance with the new provisions as in force from 01.04.2021 in terms of the decision of Union of India and others Vs Ashish Agarwal 2022 (5) TMI 240 - SUPREME COURT HELD THAT - Although the re-opening of the Assessment based on the informations gathered from the Investigating Wing of the Income Tax Department from Tirupathi vide Letter dated 04.02.2020 would arm the Department to re-open the Assessment, the ultimate Assessment Order that was passed ought to have give the particulars of the cash transactions of the account of the said employee namely Meruva Sanjeeva Kumar. This has not been mentioned in the impugned order. Therefore, the impugned order is set aside and the case is remitted back to the respondents to pass a fresh order giving the particulars of the date of cash transactions made into the account of the said employee namely Meruva Sanjeeva Kumar. Therefore, the impugned orders are set aside and to pass a fresh order on merits. Department shall furnish the date of transfers mentioned in the reasons given for re-opening the respective Assessment and any other informations based on which, such cash deposits into the account of the said employee is linked to the petitioner. Since the dispute pertains to the Assessment years 2014-15 and 2015-16, it is expected that the denovo proceedings will be completed as expeditiously as possible preferably within a period of six months from the date of receipt of a copy of this order.

Summary

Issues:
Challenge to notice under Section 148 of the Income Tax Act, 1961 for Assessment Years 2014-2015 and 2015-2016 based on re-opening of assessments. Jurisdiction of notice issued post 01.04.2021. Validity of Assessment Orders dated 30.03.2022. Requirement of furnishing details of cash transactions in employee's account.

Detailed Analysis:
The petitioner challenged the notice issued under Section 148 of the Income Tax Act, 1961 for the Assessment Years 2014-2015 and 2015-2016, seeking to re-open the assessments completed earlier under Section 143(3) of the Act. The reasons for re-opening the assessments pertained to cash credits in the bank account of an employee, triggering Section 40A(3) of the IT Act. The petitioner contended that the notice issued post 01.04.2021 lacked jurisdiction, citing a Supreme Court decision. The Department defended its actions, stating that furnishing details of the account during re-opening was unnecessary as long as information was available for the Department.

The Court considered arguments from both sides and noted that while re-opening based on information from the Investigating Wing was valid, the Assessment Order should have specified details of the cash transactions in the employee's account. Since this information was missing, the Court set aside the impugned order and remitted the case back to the Department for a fresh order with specific particulars of the cash transactions. The Court directed the Department to provide the dates of transfers mentioned in the re-opening reasons and any other relevant information linking the cash deposits to the petitioner. The Court mandated expeditious completion of denovo proceedings within six months from the date of the order for the Assessment Years 2014-2015 and 2015-2016.

In conclusion, the Court disposed of the Writ Petitions with the above observations, without imposing any costs. The connected Writ Miscellaneous petitions were closed accordingly.