NAME OF THE CASE | DECISION | ISSUE INVOLVED | JUDICIAL AUTHORITY | DATE OF DECISION |
Anurag Gupta Vs Income Tax Officer | IN FAVOUR OF THE ASSESSEE | INCOME ESCAPING ASSESSMENT(SECTION 148A(d) | High Court Bombay | 2023-03-13 |
CONCLUSIVE PART OF THE ABOVE CASE LAW
The Bombay High Court has quashed reassessment proceedings for an individual assessee as it was found to be violative of the procedure prescribed under Section 148A(b).
The court held that Section 148A(b) mandates the Revenue to provide both information and relevant material relied upon while issuing show cause notice to the assessee.
The absence of relevant material would preclude the assessee from filing an effective reply, which would violate natural justice.
The case pertained to an individual who was served a show cause notice under Section 148A(b) alleging the purchase of a warehouse of Rs. 70 lakh, which was not recorded in the books of accounts.
The individual denied the allegation, and subsequently, the Revenue issued a clarification on the unexplained conveyance deed of Rs. 10 lakh, which remained unanswered.
The Revenue passed an order under Section 148A(d) and considered both the warehouse purchase and the conveyance deed as unexplained.
The individual relied on a Supreme Court ruling in Ashish Agarwal and contended that Section 148A(b) requires the Revenue to provide both information and relevant material relied upon by them.
The Revenue, on the other hand, contended that there is no obligation on them to provide anything beyond the information.
The court observed that no material was supplied to the assessee, despite the fact that there was material available with the Revenue as can be seen from the order passed under Section 148A(d).
The court relied on the Supreme Court ruling in Ashish Agarwal, wherein directions were issued to provide information and material relied upon within 30 days to enable the assessee to file a reply.
The court held that providing information without furnishing the material would render the assessee handicap in submitting an effective reply to the show cause notice, thereby rendering the purpose of Section 148A(b) illusive.
The court quashed the show cause notice and consequential order under Section 148A(d) on the ground of violation of procedure prescribed under Section 148A(b) due to the Revenue's failure to provide the requisite material.
The court granted the Revenue the liberty to initiate reassessment proceedings by supplying relevant material subject to the limitation prescribed under the Act.
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