2023 (5) TMI 1226 - HC - Income Tax

Reopening of assessment - legality and validity of notice u/s 148 and order u/s 148A(d) - unexplained loan transaction - HELD THAT - It appears from record which AO has annexed to the notice u/s 148A(b) and order u/s 148A(d) that some of the documents which established the involvement of the petitioner in such type of transactions with the said Anil Kasera and there are names of many other persons who are involved in this type of transactions adopting same modus operandi. There is also finding of the assessing officer in the impugned order u/s 148A(d) that a sum representing in the form of entry or entries in the books of account (loan transaction) has escaped income in this case. All the aforesaid findings in the impugned order are based on material evidence which cannot be scrutinised by a writ court in exercise of its constitutional writ jurisdiction under Article 226 of the Constitution of India and be substituted with its own findings. Recently this Court has noticed that several writ petitions have been filed involving similar nature of huge unaccounted cash transactions where modus operandi is the same and involving the same broker Anil Kasera. This court considering the nature of huge financial scam is not inclined to entertain this writ petition by exercising its constitutional writ jurisdiction under Article 226 of the Constitution of India. Principal Chief Commissioner of Income Tax West Bengal Sikkim is directed to refer this case along with all other cases involving Anil Kasera where similar modus operandi has been adopted relating to unaccounted cash loan to the Enforcement Directorate (ED) and file compliance report before this Court on 13th June 2023.

Summary

Issues involved:
The judgment involves a challenge to an order under Section 148A(d) of the Income Tax Act, 1961 for the assessment year 2019-20, and the legality of a subsequent notice under Section 148 of the Act.

Summary:
The petitioner challenged the impugned order dated 30th March, 2023, alleging lack of material evidence against them and disputing the documents provided by the investigation wing. The assessing officer's findings were based on documents showing unaccounted cash transactions with a broker named Anil Kasera, involving several crores of rupees. The modus operandi included acknowledging cash loans through a 'Rukka,' using pre-decided currency note numbers, and exchanging messages for collection/delivery of cash. The assessing officer found that Rs. 10.36 crore had escaped income assessment in the case. The court noted that the findings were based on material evidence and declined to interfere with the impugned order.

The court found that the impugned proceeding was not without jurisdiction, lacked procedural irregularities, or violated principles of natural justice. Due to the nature of the case involving a significant financial scam with similar modus operandi in other cases, the court dismissed the writ petition and directed the Principal Chief Commissioner of Income Tax to refer the case, along with others involving Anil Kasera, to the Enforcement Directorate for further action. The matter was listed for a compliance report on 13th June, 2023.