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TMI Blog2024 (8) TMI 565X X X X Extracts X X X X X X X X Extracts X X X X ..... sment was flawed and therefore we are unable to sustain the impugned notices. Discrepancy noticed between the share prices as provided by the petitioner from the exchange rate (NSE) - Undoubtedly, this aspect of the matter was never taken up with the petitioner in the notice issued u/s 148A (b). The noticee or the assessee should not be prejudiced or be taken by surprise. The uncontroverted fact is that in the notice under Section 148A (b) of the Act, there is no mention of any discrepancy in the share price. foundational material alone would be relevant for the purposes of evaluating whether reassessment powers were justifiably invoked. Revenue cannot take a fresh ground while passing order under Section 148A (d) of the Act. We are clearly of the view that notice and the reasons given, therefore do not conform to the principles of natural justice as the assessee did not get a proper and adequate opportunity to reply to the allegations. For the above reasons, we hold that the reasons recorded for issuance of notice u/s 148 cannot be sustained. Accordingly, the impugned notices issued u/s 148A (b), order passed under Section 148A (d) and consequential notice under Section 148 issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igital) (47,48,10,000) Closing balance on March 2019 31 10,00,000 5. Respondent issued notice dated 09.03.2023 under Section 148A (a) of the [Act] for conducting enquiry in respect of transactions pertaining to the petitioner during the impugned AY. 6. Petitioner filed submissions dated 15.03.2023 in response to the said notice dated 09.03.2023, furnishing all the details of the transactions along with the requisite documents/information, clarifying that no income was earned by the petitioner in India during the impugned AY and that petitioner was not required to file any return of income in India. 7. Respondent vide notice dated 22.03.2023 under Section 148A (b) of the Act, sought to initiate assessment under Section 147 read with Section 148 of the Act, pursuant to the information flagged by the Risk Management Strategy, alleging that in the absence of return of income, the source of income of the above investment remained unexplained. 8. Petitioner yet again filed submissions dated 31.03.2023 stating that during the impugned AY, no income had accrued or was received in India. Further, petitioner pointed out various fallacies in the notice dated 22.03.2023 issued under Section 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned order under Section 148A (b) dated 26.04.2023 substituted the reasons recorded at the time of issuing the impugned notice under Section 148A (b) of the Act without confronting the petitioner about the change of stand. It is thus argued that the impugned notices and the order are liable to be quashed/set aside. 16. Per contra, learned counsel for the respondent has argued that documentary proof having not been submitted by the petitioner with regards the source of investment, there is due justification for issuance of notice under Section 148A (b) of the I.T. Act and that petitioner would get ample opportunity during the course of proceedings before the appropriate statutory forum to show that the finding of fact arrived at by the Assessing Officer was erroneous. 17. It is further submitted that the question of going into the veracity and genuineness of the material/evidence forming the opinion of the Assessing Officer suggesting that the income of the petitioner/assessee has escaped assessment ought not to be gone into while exercising the writ jurisdiction under Article 226. It is argued that petition is devoid of any merit. REASONING DECISION 18. A perusal of the rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... escaped assessment is entirely without basis and is rejected as such. 20. Following the aforesaid, we find that the fundamental premise of the Revenue that the investment made by the petitioner in shares amounted to income which has escaped assessment was flawed and therefore we are unable to sustain the impugned notices. 21. There is yet another reason as to why the impugned notices cannot be sustained, inasmuch as, the basis of order dated 26.04.2023 passed under Section 148A (d) of the Act is the alleged discrepancy noticed between the share prices as provided by the petitioner from the exchange rate (NSE). Undoubtedly, this aspect of the matter was never taken up with the petitioner in the notice issued under Section 148A (b) of the Act. The noticee or the assessee should not be prejudiced or be taken by surprise. The uncontroverted fact is that in the notice under Section 148A (b) of the Act, there is no mention of any discrepancy in the share price. 22. Reiterating the aforesaid position, this Court in W.P.(C) 10485/2023 titled as Banyan Real Estate Fund Mauritius Vs. Assistant Commission of India Tax Circle International Tax 112 Anr. has held as under: 28. Before concluding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision:- 13. With regard to the additional reasons which were recorded subsequent to the issuance of notice under section 148 of the said Act, we have already observed that this could not have been done by the Assessing Officer. The validity of the proceedings initiated upon a notice under section 148 of the said Act would have to be judged from the stand point of the reasons which existed at the point of time when the section 148 notice was issued. The additional reasons cannot be provided or recorded subsequent to the issuance of notice under section 148. It is, of course, open to the Assessing Officer, if some other information comes within his knowledge to issue another notice under section 148 for different reasons. But that is not the case here. On the basis of the very same notice issued under section 148, the Assessing Officer has recorded reasons subsequent to the issuance of notice and this is impermissible in law. 7. It becomes pertinent to observe that the validity of the proceedings initiated upon a notice under Section 148 of the Act would have to be adjudged from the stand point of the reasons which formed the basis for the formation of opinion with respect to esc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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