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TMI Blog2024 (10) TMI 710X X X X Extracts X X X X X X X X Extracts X X X X ..... ce could have been issued only after conducting the inquiry on part of the respondent-AO. We are of the opinion that the impugned notice issued u/s 148A (b) of the Act could not have been issued for verification on the part of AO and therefore, the same would fail and accordingly, the petition succeeds and the impugned notice dated 05.03.2024 and the consequential order u/s 148A (d) of the Act and the notice under Section 148 are hereby quashed and set aside. We make it clear that if the respondent wishes to re-initiate the proceedings under the provisions of the law, this order would not come in way and the respondent would be at liberty to initiate such proceedings as per the provisions of the Act. Rule is made absolute to the aforesaid extent. No orders as to cost. - HONOURABLE MR. JUSTICE BHARGAV D. KARIA AND HONOURABLE MRS. JUSTICE MAUNA M. BHATT Appearance: For the Petitioner(s) No. 1 : Mr. B.S. Soparkar (6851). For the Respondent(s) No. 1 : Mrs Kalpana K Raval (1046). ORAL JUDGMENT (PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) 1. Heard learned advocate Mr. B.S. Soparkar for the petitioner and learned Senior Standing Counsel Mr. Karan Sanghani for learned advocate Mrs. Ka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority could not have rectified the notice issued under Section 148A (b) of the Act in the order passed under clause (d) of Section 148A of the Act. 5.3. Referring to the impugned order dated 24th March, 2024, it was pointed out that the order is passed on different basis requiring on the ground that the loan obtained by the petitioner is not used for the business purpose and accordingly, the entire order is on a different tangent. It was therefore submitted that there is no violation of contractual conditions by the petitioner by utilising the loan to purchase the property and even if it be so it does not amount to escapement of income for the respondent to take any action. 5.4. Learned advocate Mr. B.S. Soparkar, however, emphatically submitted that the impugned notice issued under Section 148A (b) of the Act is in nature of inquiry and the same is not issued as per the provisions of the said section. It was submitted that in the impugned notice, the respondent has called upon the petitioner to submit the information for verification which is not the requirement under the provisions of the Act. 5.5. In support of his submissions, reliance was placed on the decision of this Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned advocates for the respective parties and on perusal of the impugned notice issued under Section 148B of the Act, it is not in dispute that the said notice is issued for calling upon the petitioner to submit various details for verification of the data which leads to the only conclusion that the notice is issued for inquiry as contemplated under Section 148A (a) of the Act. The relevant portion of the said notice is reproduced hereinbelow : As per the above report, the assessee has introduced long term borrowings of Rs. 61,00,00,000/- just after the incorporation of the assessee company and the source, genuineness and creditworthiness of the person from whom loan received by the assessee has to be verified. 1) With respect to the long term borrowings of Rs. 61,00,00,000/- taken during the Financial year, kindly submit the below specified details: a) Name and address of the lenders of the loan. b) PAN of the lenders. c) Amount of loan accepted during the year. d) Amount of loan repaid during the year (squared up loan). e) Quantum of interest paid and rate of interest. f) Business purpose for which the loan was taken and income earned by utilisation of funds. 2) Provide docum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment and after such inquiry, issued the notice under Section 148A (b) of the Act to provide an opportunity of being heard to the assessee by serving a show-cause notice. However, in the facts of the case, the respondent has issued the notice under clause (b) of the Section 148A of the Act as if the inquiry is to be conducted under clause (a) of Section 148A of the Act and therefore, the impugned notice cannot be commensurate the requirement of clause (b) of Section 148A of the Act as such notice could have been issued only after conducting the inquiry on part of the respondent-Assessing Officer. 10. In case of Safal Constructions India (Supra), this Court in similar facts, has held as under : [36] Considering the above facts, notice dated 28th March 2023 along with the Annexures issued under Section 148A (b) of the Act cannot be said to be the notice requiring the assessee to provide an opportunity of hearing to show cause as to why the notice under Section 148 of the Act should not be issued on the basis of the information which suggests that the income chargeable is escaped assessment. The notice is only in the nature of inquiry as contemplated under Section 148A (a) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) of Section 148A of the Act. In the case on hand, we are not required to examine the correctness of the contentions qua the facts of the case as raised on behalf of the petitioner as it would be premature as the case of the petitioner is based upon the legal contentions that the notice under Section 148A (b) of the Act is in the nature of notice under Section 148A (a) of the Act and that the notice issued under Section 148A (b) is without considering the contentions raised by the assessee in the reply to the notice under Section 148A (b) of the Act as per Clause (c) of Section 148A of the Act. On perusal of the notice under Section 148A (b) of the Act, it is clearly seen that the annexures do not contain any information, it is a questionnaire requiring the petitioner to provide details as sought for and therefore, it was an intention of the Assessing Officer who was to conduct an inquiry after receiving information from the assessee and therefore, notice is deemed to be the notice under Section 148A (a) of the Act. Thus, there is a gross procedural error from the very inception of the procedure rendering the same is bad in law. [39] For the reasons recorded as above, as the noti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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