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TMI Blog2024 (9) TMI 294X X X X Extracts X X X X X X X X Extracts X X X X ..... presents the unexplained credit, in accordance with law and affording an opportunity of personal hearing to the petitioner. Assessee appeal allowed. - Honourable Mr. Justice Mohammed Shaffiq For the Petitioner : Mr. G. Karthik For the Respondents : Mr. J. Parekh Kumar Senior Standing Counsel ORDER This Writ Petition is filed challenging the impugned order dated 30.04.2024, issued under clause (d) of Section 148-A of the Income Tax Act and subsequent impugned notice dated 30.04.2024, issued under Section 148 of the Income Tax Act on the following grounds viz., a) that the petitioner's objection dated 25.04.2024 has not been considered in its proper perspective; b) opportunity to explain his objection in person has not been considered; c) the details based on which the notice under Section 148-A(b) of the Act was issued, has not been disclosed, despite the specific request made by the petitioner in this regard. 2. The notice under Section 148-A(b) of the Act, dated 30.03.2024, was issued on the premise that there were unexplained credit to the account of the petitioner to an extent of Rs. 40,25,000/- that the assessee has not filed the return of income tax for the assessment ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns 147 to 151 of the Income Tax Act, 1961 governing reassessment proceedings by way of the Finance Act, 2021, which was passed on 28- 3-2021 ............. 148-A.Conducting inquiry, providing opportunity before issue of notice under Section 148. The Assessing Officer shall, before issuing any notice under Section 148 (a) 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; (b) provide an opportunity of being heard to the assessee, with the prior approval of specified authority, by serving upon him a notice to show cause within such time, as may be specified in the notice, being not less than seven days and but not exceeding thirty days from the date on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice under Section 148 should not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a); (c) consider the reply of asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income chargeable to tax has escaped assessment; (ii) provide an opportunity of being heard to the assessee, with the prior approval of specified authority; (iii) consider the reply of the assessee furnished, if any, in response to the show-cause notice referred to in clause (b); and (iv) decide, on the basis of material available on record including reply of the assessee, as to whether or not it is a fit case to issue a notice under Section 148 of the IT Act; and (v) the AO is required to pass a specific order within the time stipulated. 20. Therefore, all safeguards are provided before notice under Section 148 of the IT Act is issued. At every stage, the prior approval of the specified authority is required, even for conducting the enquiry as per Section 148-A(a). Only in a case where, the assessing officer is of the opinion that before any notice is issued under Section 148-A(b) and an opportunity is to be given to the assessee, there is a requirement of conducting any enquiry, the assessing officer may do so and conduct any enquiry. Thus if the assessing officer is of the opinion that any enquiry is required, the assessing officer can do so, however, with the prior approval ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... empty formality/ dead letter. 8. In the background of the above judicial pronouncement as to the scope and purport of Section 148-A of the Act, this Court is of the view that the impugned order insofar as it does not disclose the basis of arriving at unexplained credit of Rs. 40,25,000/-, suffers from non disclosure of reason which prompted the invocation of Section 148-A of the Act and the same has resulted in denial of opportunity to the petitioner to put forthwith his explanation. As it was held in the judgment referred supra, the procedures being contemplated under Section 148-A of the Act is not an empty formality. 9. In any view, the circular of the department in F.No.299/10/2022- Dir(Inv.III)/611, dated 01.08.2022, insofar as it provides that a request for personal hearing would be considered/dealt with is binding on the respondent authorities. In this regard, it may be relevant to refer to the earlier order of this Court dated 16.11.2022 passed in W.P.(MD)No.21357 of 2022 , which reads as under: 12. In the circumstances, though this Court finds that the arguments of the learned Standing Counsel for the Respondent may have merits, I do not intend to express any view in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iii) The apex Court in Paper Products Ltd. v. Commissioner Of Central Excise, [1999] 112 ELT 765, while interpreting section 37-B of the Central Excise Act, 1944 which is pari materia to section 28-A of the Tamil Nadu General Sales Tax Act held that circulars issued by the Central Board of Excise and Customs are binding on the departmental authorities and they cannot take a contrary stand, and that the department cannot repudiate a circular issued by the Board on the basis that it was inconsistent with a statutory provision and further held that the assessee can contest the validity or legality of such departmental circulars or instructions; the department do not have a right to file an appeal against the correctness or binding nature of a circular; the department's actions have to be consistent with the circulars; and that consistency and discipline are of far greater importance than winning or losing court proceedings. (iv). In UCO Bank v. Commissioner of Income-tax, [1999] 237 ITR 889, the apex Court held that the circular issued by the Revenue under section 119 of the Income-tax Act are binding on the revenue and such circulars are meant for ensuring proper administration ..... X X X X Extracts X X X X X X X X Extracts X X X X
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