2023 (3) TMI 864 - HC - Income Tax

Validity of reopening of assessment u/s 147 - Validity of order u/s 148A - non-supply of the necessary information and the material documents on the basis of which the notices u/s 148 and notice u/s 148A(d) has been issued - HELD THAT - Undisputedly, the details of the information documents sought for by the petitioner in his request letter has not been made available to the petitioner by the department. The plain reading of the notice issued u/s 148A(d) would reveal that though there is a reference of these informations by the department but the department as such has not made these documents and material informations available to the petitioner. In the absence of such materials and necessary informations to the petitioner by the department it cannot be expected that the petitioner would be in a position to justify his acts and conduct, nor would he be able to provide for the reasonable explanation to these informations which have been collected and relied by the department, but have not been made available to the petitioner. Thus notice u/s 148A(d) and u/s 148 issued in this regard by the department are set-aside/quashed. The matter stands remitted back to the department concerned with a further direction that in the light of the decision of Union of India others v. Ashish Agrawal ( 2022 (5) TMI 240 - SUPREME COURT the necessary informations and material documents are made available to the petitioner, those which are referred to in the notice u/s 148A(b) - Decided in favour of assessee.

Summary

Issues:
Challenge to notice under Section 148 of the Income Tax Act, 1961 and notice under Section 148A(d) dated 15.07.2022.

Analysis:
The petitioner challenged the notices issued under Section 148 and Section 148A(d) due to non-supply of necessary information and material documents. The petitioner argued that he had requested specific information and documents related to alleged transactions, bogus purchases, acceptance of bogus bills, documentary evidence, inquiry details, and more, which formed the basis of the notices. The petitioner contended that the denial of these documents violated the law, depriving him of the opportunity to defend himself effectively. Reference was made to a similar case in the Delhi High Court to support the petitioner's argument.

The respondents, however, claimed that the petitioner had received the notice under Section 148(b) and had replied without raising objections or requesting additional information. They argued that the notice contained all relevant information, and the petitioner was aware of the grounds for prosecution. Reference was made to a Delhi High Court decision emphasizing the importance of providing specific material and information to the assessee for a meaningful response during inquiry proceedings.

The court noted that the department had not provided the requested information and documents to the petitioner, despite references in the notices. It was emphasized that without access to these materials, the petitioner could not justify his actions or provide reasonable explanations. The court considered previous judgments from the Delhi High Court and the Supreme Court, which highlighted the need for providing relevant material to the assessee for a fair assessment process.

Based on the authoritative decisions cited, the court allowed the writ petition, setting aside the notices dated 15.07.2022 and 19.07.2022. The matter was remitted back to the department with directions to provide the necessary information and documents referred to in the notice under Section 148A(b) and to pass a fresh order after considering the petitioner's submissions. The court concluded by disposing of the writ petition in favor of the petitioner.