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TMI Blog2024 (3) TMI 431X X X X Extracts X X X X X X X X Extracts X X X X ..... ped assessment. Use of the word suggest denote the legislative intent that that no conclusion at that stage is required to be arrived at but only a prima facie consideration is necessary to initiate proceedings u/s 148A. The materials, which have been disclosed, can neither be said to be patently false, much less irrelevant or extraneous to the relevant assessment year and the transactions made by the petitioner. The petitioner was given an opportunity of being heard. Though number of grounds were urged by the petitioner, apart from his demand for supply of various documents and material from which the information was collected and shared with the petitioner, they are more in the nature of explaining the transaction to say that the transaction amount of Rs. 50,00,000/-was not taxable. However, this is not the stage where assessment has to be carried out. The Assessing Authority, at this stage of making enquiry u/s 148A, does not make any assessment but the purpose of enquiry is to find out whether any income chargeable to tax has escaped assessment. Clause (d) of Section 148A clearly reveals that after receipt of reply in response to the notice under Clause (b), the Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Bissa REPORTABLE ORDER 1. Aggrieved by the reopening of the assessment for the assessment year 2019-20, vide impugned order dated 29.03.2023 passed by the ITO Ward-1(2), BKN in exercise of powers conferred under Section 148A(d) of the Income Tax Act, 1961, the petitioner has filed this writ petition. Consequential notice under Section 148 of the Act, has also been assailed. 2. Quint essential facts, necessary for determination of the cause and controversy raised in this petition, as succinctly stated in the writ petition, are that the petitioner is an individual assessee and for the year under consideration i.e. the assessment year 2019-20, he filed return of income declaring his income as Rs. 6,17,070/- on 2nd October, 2019. A notice under Section 148 A(b) of the Act, however, came to be issued on 14.03.2023 on the basis of the alleged information received from DDIT (Inv.), Mumbai that the petitioner opted accommodation entries of Rs. 50,00,000/- through Allbright Electricals Pvt. Ltd. A reply was submitted by the petitioner in which the petitioner sought to explain that he had not made any such transaction with M/s Hubtown Limited or Mahavir Chand Duggar and he has not taken an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er had specifically asked for personal hearing, the authority was duty-bound to afford an opportunity of hearing in which the petitioner could have satisfied the authority that present was not a case of reopening the assessment. This opportunity, having been denied, the impugned order apart from various illegalities pointed out, suffers from violation of principles of natural justice and fairness. 6. Next submission of learned counsel for the petitioner is that the impugned order is mechanical, non-speaking and without consideration of the material objections raised by the petitioner. He would submit that except quoting, the objections raised by the petitioner, the competent authority has only performed formality and has not met out any of the objections by giving reasons, much less weighty reasons, as to why the objections were not sustainable. He would submit that the ITO concerned had completely pre-judged the issue. He did not apply his mind to the admitted facts on the record that the banking transaction details clearly disclose the details of transaction between the petitioner and Allbright Electricals Pvt. Ltd. and that it was not a case of any accommodation entries but a ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved at to reopen assessment in exercise of powers under Section 148A of the Income Tax Act and, therefore, merely because supply of documents and personal hearing have not taken place, in the peculiar circumstances of the present case, challenge to the order is not sustainable in law. Learned counsel for Revenue places reliance on the Division Bench judgment of this Court in the case of M/s Chetak Enterprises Ltd. Vs. The Assistant Commissioner of Income Tax [D.B. Civil Writ Petition No. 7062/2022]. 8. We have heard and perused the records and given anxious consideration of the respective submissions made by learned counsel for the parties. 9. A perusal of the notice under Section 148 A (b) of the Act reveals that the basis for issuance of notice was receipt of information from DDIT (Inv.) with regard to a heavy transaction having taken place between the petitioner and one Allbright Electricals Pvt. Ltd. It further reveals that a search action under Section 132 of the IT Act was conducted by the office of DDIT (Inv.), Mumbai on M/s Hubtown Limited Ltd on 30.07.2019. As per the search proceedings, statement of Mr. Mahaveer Duggar was recorded on oath. Data backup of laptop and iphon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich the information was collected and shared with the petitioner, they are more in the nature of explaining the transaction to say that the transaction amount of Rs. 50,00,000/-was not taxable. However, this is not the stage where assessment has to be carried out. The Assessing Authority, at this stage of making enquiry under Section 148A, does not make any assessment but the purpose of enquiry is to find out whether any income chargeable to tax has escaped assessment. That being the limited object and purpose of enquiry under Section 148A of the Act, by its very nature, the purpose of enquiry is only to find out whether a case for reassessment is made out or not and not whether any stated amount is liable to tax because that issue would be examined in detail at the stage of reassessment proceedings. 13. Clause (d) of Section 148A clearly reveals that after receipt of reply in response to the notice under Clause (b), the Assessing Officer is required to decide, on the basis of material available on record, including the reply of the assessee, whether or not it is a fit case to issue notice under Section 148. Therefore, the enquiry under Section 148A is intended to decide whether a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inable in law and relief was provided. The judgments cited at the bar by the petitioner are, therefore, distinguishable on facts. 16. A Division Bench of this Court in the case of M/s Chetak Enterprises Ltd.(supra) (in which one of us, M.M. Shrivastava, J. was a party), while dealing with almost a similar issue on somewhat similar factual background, noted legal position as enumerated in various decisions of the Hon ble Supreme Court, this Court and other High Courts. 12. In 'Rasulji Buxji Kathawala vs. Income Tax Commissioner, Delhi and another' (Civil Writ No.44 of 1955, dated 2.4.1956) while dealing with the similar situation under the 1922 Act, Division Bench of this Court held that- But where as in this case no part of the Act is being attacked, there is, in our opinion, no justification for us to intervene at this stage when other remedies which are not necessarily onerous are still open to the applicant under the Act. We, therefore, refuse to intervene at this stage in this case, and leave it to the applicant to pursue his remedies under the Income-tax Act so far as the question of his chargeability to income-tax under the Act, or other matters are concerned. 13. Whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer Ward-10(3) Delhi , while considering the same question held that: 6. Though it is the petitioner's case that the impugned order is erroneous on facts, yet this Court is of the opinion that the petitioner would have ample opportunity during the course of proceedings before different statutory forums to show that the finding of fact arrived at was erroneous. Moreover, at this stage, no assessment order has been passed and it has only been observed that it is a fit case for issuance of notice under Section 148 of the Act. Infact, the Supreme Court in Commissioner of Income Tax and Ors. Vs. Chhabil Das Agarwal, (2014) 1 SCC 603 has held that as the Income Tax Act, 1961 provides complete machinery for assessment/reassessment of tax, assessee is not permitted to abandon that machinery and invoke jurisdiction of High Court under Article 226. 16. Recently, a Division Bench of this Court in the case of Laxmi Meena vs. Union of India Ors. [D.B. Civil Writ Petition No. 447/2023, decided on 15.02.2023] held that in the matter of challenge to order passed under Section 148A of the Act followed by issuing notice under Section 148 of the Act, the petitioner had not alleged any proced ..... X X X X Extracts X X X X X X X X Extracts X X X X
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