2024 (2) TMI 160 - HC - Income Tax

Validity of Reopening of assessment - non-supply of the relevant documents - denial of natural justice - HELD THAT - From a perusal of the order passed u/s 148A (d) and subsequent notice issued u/s 148, it is quite vivid that all the relevant documents upon which the Assessing Officer relied on for reopening of the proceedings were supplied to the petitioner but the letter dated 19.10.2023 reflects that due to large file only some part of attachments of the notice was sent through ITBM software and some documents through postal service on 18.02.2023. Further, in response dated 02.03.2023, the petitioner has specifically stated that the relevant documents have not been supplied and further in the last para, the petitioner has categorically stated that cheque book and statement of Shri Deepak Nanjyani have not been supplied. Taking into consideration the flaws in the enquiry and non-supply of the relevant documents, this Court is of the opinion that the principle of natural justice has not been complied with in its full rigor and also the provisions of Section 148A have not been followed by the revenue, therefore, the order passed by the AO u/s 148 A (d) and notice issued u/s 148 are hereby set aside. Decided in favour of asessee.

Issues involved:
The petitioner challenged the letter/order dated 30.03.2023 passed under Section 148A(d) of the Income Tax Act, 1961, along with approval by the specified authority under Section 151 of the Act, 1961 and notice dated 31.03.2022 issued under Section 148 of the Act, 1961.

Issue 1: Non-supply of relevant documents by Assessing Officer

The petitioner contended that despite repeated requests, the relevant documents were not supplied by the Assessing Officer. The petitioner argued that the stand taken by the Assessing Officer in the order dated 30.03.2023 differed from the letter dated 19.10.2023. The petitioner sought for the order to be set aside and the matter to be remitted back for a fresh order after providing all relevant documents.

Issue 2: Respondent's argument on document supply

The respondent's counsel claimed that all relevant documents were indeed supplied to the petitioner, and the petitioner submitted a response on 25.02.2023 without raising any objection regarding document supply. The respondent contended that the matter had already been sent to the faceless unit and argued for the dismissal of the petition.

Upon perusal of the documents and arguments presented, the Court noted that the petitioner had raised objections regarding the issuance of the notice, stating that the information was based on the investigating authority without independent verification. The petitioner also requested the opportunity for cross-examination regarding certain documents and statements.

The Court observed discrepancies in the document supply process, as highlighted in the petitioner's response dated 02.03.2023, where it was mentioned that relevant documents had not been provided, specifically the cheque book and statement of a certain individual. Due to these flaws in the enquiry and non-supply of relevant documents, the Court concluded that the principles of natural justice were not fully complied with, and the provisions of Section 148A of the Act were not followed by the revenue.

Consequently, the Court set aside the order passed by the Assessing Officer under Section 148A(d) of the Act on 30.03.2023 and the notice issued under Section 148 of the Act on 31.03.2023. The matter was remitted back to the Assessing Officer to pass a fresh order after providing all relevant documents, including the enquiry report, to the petitioner.

In conclusion, the petition was disposed of with the aforementioned observations and directions. The petitioner was directed to inform the faceless unit about the Court's decision, and the letter dated 19.10.2023 was taken on record for reference in the proceedings.

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