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TMI Blog2024 (1) TMI 368X X X X Extracts X X X X X X X X Extracts X X X X ..... n it. In our opinion the plain reading of Section 148A clearly suggests that the Assessing Officer is required to supply information before issuing notice under Section 148A in the prescribed manner and not the other material on the basis of which it has formed prima facie opinion that income of the assessee chargeable to tax has escaped assessment. In the present case, the Jurisdictional Authority along with notice dated 13.3.2023 under Section 148A(b) of the IT Act has supplied information available with it with the documents such as insight portal, wherein information/description has been given. In the notice dated 13.3.2023 under Section 148A(b) and the order dated 28.3.2023 under Section 148A(d) of the IT Act issued by the Assessing Officer, it is clearly mentioned that in the insight portal, the case of the petitioner is flagged on High Risk CRIU/RU PAN Case for the relevant assessment year. We are of the view that the case of the petitioner is covered by information specified in Explanation 1(i) of Section 148 of the IT Act. It is not the case of the petitioner that information disclosed vide notice under Section 148A(b) of the IT Act is not covered by the information specif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bove notice, the petitioner filed a detailed reply dated 17.3.2023, wherein apart from submitting his defence, he has prayed that before proceeding further in the matter, he may be provided copy of the report of the DDIT/ADIT (Inv.) and complete details and particulars of fake entities on the basis of which it has been alleged by the respondent-department that the petitioner has received bogus invoice from fake and bogus entities. 6. The Jurisdictional Authority, after considering the reply filed on behalf of the petitioner, has passed the order dated 28.3.2023 under Section 148A(d) of the IT Act and subsequently issued notice dated 28.3.2023 under Section 148 of the IT Act, which are under challenge in these writ petitions. 7. Learned counsel for the petitioner has argued that the impugned order dated 28.3.2023 under Section 148A(d) of the IT Act as well as the consequential notice dated 28.3.2023 under Section 148 of the IT Act are in contravention of the principles of natural justice and, therefore, it is prayed that the same may be declared perse illegal and void. It is further argued that the impugned order dated 28.3.2023 has been passed by the Jurisdictional Authority withou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Micro Marbles Private Limited Vs. Office of the Income Tax Officer (DBCWP No. 13719/2021) decided on 4.1.2023, has categorically held that the material, on which, the assessing authority has placed reliance to initiate proceedings under Section 148 of the IT Act, is required to supply to the assessee. Learned counsel has also placed reliance on the decision of Division Bench of Delhi High Court in Charu Chains and Jewels Pvt. Ltd. Vs. Assistant Commissioner of Income Tax, reported in (2023) 456 ITR 352 and submitted that the underlined information/material, which has been made basis of assessment/re-assessment proceedings, is required to be furnished to the assessee. 13. Learned counsel for the petitioner, therefore, submitted that in the present case, admittedly, the material on which, the Jurisdictional Authority has placed reliance has not been supplied to the petitioner, therefore, the order dated 28.3.2023 passed by the Jurisdictional Authority under Section 148A(d) and consequential notice dated 28.3.2023 under Section 148 of the IT Act are liable to be quashed and set aside. 14. Per contra, learned counsel for the respondents has vehemently opposed these writ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year: Provided further that nothing contained in the first proviso shall apply in a case where any income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment for any assessment year. Provided also that the Assessing Officer may assess or reassess such income, other than the income involving matters which are the subject matters of any appeal, reference or revision, which is chargeable to tax and has escaped assessment. Explanation 1.- Production before the Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso. Explanation 2-For the purposes of this section, the following shall also be deemed to be cases where income chargeable to tax has escaped assessment, nam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r this section, the Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment, and such issue comes to his notice subsequently in the course of the proceedings under this section, irrespective of the fact that the provisions of section 148A have not been complied with.] 148. Before making the assessment, reassessment or recomputation under section 147, and subject to the provisions of section 148A, the Assessing Officer shall serve on the assessee a notice, along with a copy of the order passed, if required, under clause (d) of section 148A, requiring him to furnish within a period of three months from the end of the month in which such notice is issued or such further period as may be allowed by the Assessing Officer on the basis of an application made in this regard by the assessee), a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or (iv) the Assessing Officer is satisfied, with the prior approval of Principal Commissioner or Commissioner, that any books of account or documents, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee, the Assessing Officer shall be deemed to have information which suggests that the income chargeable to tax has escaped assessment in the case of the assessee [where] the search is initiated or books of account, other documents or any assets are requisitioned or survey is conducted in the case of the assessee or money, bullion, jewellery or other valuable article or thing or books of account or documents are seized or requisitioned in case of any other person. Explanation 3.- For the purposes of this section, specified authority means the specified authority referred to in section 151.] 148A. The Assessing Officer shall, before issuing any notice under section 148, (a) conduct a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therein, 24 [relate to, the assessee; or (d) the Assessing Officer has received any information under the scheme notified under section 135A pertaining to income chargeable to tax escaping assessment for any assessment year in the case of the assessee.] Explanation . For the purposes of this section, specified authority means the specified authority referred to in section 151.] 19. As per unamended Section 147 of the IT Act, the Assessing Officer could initiate assessment/reassessment proceedings only if he has reason to believe that the income chargeable to tax of an assessee has escaped assessment, however, with the amendment in Sections 147, 148 and insertion of Section 148A vide Finance Act 2021 w.e.f. 1.4.2021, the assessment/reassessment proceedings can be initiated by the Assessing Officer on receiving information only. In other words, the requirement of Assessing Officer of having reason to believe is no more there for initiating assessment/reassessment proceedings in a case of escaped assessment in respect of income chargeable to tax. 20. Section 148A of the IT Act provides procedure required to be followed by the Assessing Officer before issuance of notice under Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n our opinion the plain reading of Section 148A clearly suggests that the Assessing Officer is required to supply information before issuing notice under Section 148A in the prescribed manner and not the other material on the basis of which it has formed prima facie opinion that income of the assessee chargeable to tax has escaped assessment. 26. We found support from the judgments of the High Court of Allahabad rendered in Deepak Kumar Yadav Vs. Principal Commissioner of Income Tax and Ors., reported in 2023/AHC/102834 and High Court of Madhya Pradesh in Amrit Homes Private Limited Vs. Deputy Commissioner of Income Tax and Another, reported in 2023 SCC Online MP 2359. 27. The High Court of Allahabad in Deepak Kumar s case (supra), while dealing with Section 148A of the IT Act, has held as under : 9. Reading of Section 148A reveals that the assessing authority shall, before issuing any notice under section 148 conduct any enquiry, if required, with the prior approval of specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment. On receipt of such information the Assessing Officer is required to provide an opportunit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment under section 147, subject to the provisions of section 148 to 153 of the Act of 1961. 12. The Act of 1961 does not contemplate any detailed adjudication on the merits of information available with the Assessing Officer at the stage of passing order under section 148A(d) of the Act of 1961. In our considered view there is a specific purpose for not introducing any further enquiry or adjudication in the statute, on the correctness or otherwise of the information, at this stage. The reason for it is obvious. Under the scheme of the Act a detailed procedure has been provided under Section 148 for issuance of notice whereafter the assessing authority has to determine, in the manner specified, whether income has escaped assessment and the defence of assessee, on all permissible grounds, remains open to be pressed at such stage. The ultimate determination made by the assessing authority under Section 147 for reassessment is otherwise subject to appeal under Section 246-A of the Act. Merits of the information referable to Section 148A thus remains subject to the reassessment proceedings initiated vide notice under Section 148 of the Act. It is for this reason that issues which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inter alia held thus: 5. We see no justifiable reason to interfere with the order under challenge. However, we clarify that when a notice under Section 148 of the Income Tax Act is issued, the proper course of action for the noticee is to file return and if he so desires, to seek reasons for issuing notices. The Assessing Officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the noticee is entitled to file objections to issuance of notice and the Assessing Officer is bound to dispose of the same by passing a speaking order. In the instant case, as the reasons have been disclosed in these proceedings, the Assessing Officer has to dispose of the objections, if filed, by passing a speaking order, before proceeding with the assessment in respect of the abovesaid five assessment years. 9. Section 148A on becoming a part of the Statute Book provided an additional opportunity to the assessee of being heard to the assessee before reopening case of escaped assessment. 10. From bare perusal of newly inserted Section 148A, it is obvious that it statutorily provides for the following prerequisite before issuance of notice in cases of escaped assessment. A. Conduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of GKN Driveshafts (India) Ltd. (supra) nor in Section 148A any such indication can be gathered. 14. The only duty cast upon the Assessing Officer is to supply information by mentioning the same in the show-cause notice issued u/S 148A(b) of IT Act. 15. This Court has culled out the foundational prerequisite of Section 148A, as aforesaid, to emphasize that if the inquiry contemplated in Section 148A is interpreted to mean a detailed inquiry where both sides can seek and adduce evidence/material (documentary/ocular), then the entire object behind Section 148A would stand defeated. 16. The object behind Section 148A as is evident from the findings in the fountainhead decision of GKN Driveshafts (India) Ltd. (supra), is to enable the assessee to be informed of the reasons and information suggesting that income chargeable to tax has escaped assessment and, therefore, in turn to empower the assessee to prepare and file an effective reply and thereafter the Assessing Officer to pass an order u/S 148A(d), followed by issuance of notice u/S 148 of IT Act. 17. The object behind insertion of Section 148A by the Legislature w.e.f. 01.04.2021 inter alia appears as follows: (a) to preven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the inquiry contemplated u/S 148A. However, it has to be seen whether this concept can be stretched to the extent of supplying of material/evidence in support of the opinion of Assessing Officer that certain income has escaped assessment. 22. No doubt, the concept of reasonable opportunity in nontaxing statutes is applied to it s fullest (including supply of adverse material) irrespective of presence of any express provision or not in cases where the authority concerned passes order entailing civil consequences of adverse nature. 23. Pertinently, the law of interpretation of taxing statute is at variance to the law of interpretation of non-taxing statute. The difference is that the taxing statute is to be understood by the plain words used in it without taking aid of other tools of interpretation of statutes e.g. intendment, implication or reading into. 24. On the anvil of aforesaid time tested principle as regards interpretation of taxing statute, it is obvious that the provisions of Section 148A of IT Act so far as it relates to the nature of inquiry contemplated therein is to be understood from the plain language used by the Legislature. 25. The language of Section 148A(b) sti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vidence/material and the supportive reasons to form the said opinion. 33. From the fact of the case, it is obvious from the show-cause notice u/S 148A(b) vide Annexure-P/3 that it is accompanied by annexure which informs the petitioner/assessee of the reasons and information which persuaded the Assessing Officer to form the tentative opinion that income pertaining to assessment year 2016-2017 has escaped assessment. Moreso, the petitioner/assessee has also filed a detailed reply (Annexure-P/4) to the said notice. 34. From the above, it is evident that the impugned order u/S 148A (b) vide Annexure-P/5 and the consequential notice u/S 148 were issued/passed after following due process of law. 29. In the present case, the Jurisdictional Authority along with notice dated 13.3.2023 under Section 148A(b) of the IT Act has supplied information available with it with the documents such as insight portal, wherein information/description has been given. In the notice dated 13.3.2023 under Section 148A(b) and the order dated 28.3.2023 under Section 148A(d) of the IT Act issued by the Assessing Officer, it is clearly mentioned that in the insight portal, the case of the petitioner is flagged o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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