D.b. Civil Writ Petition v. The Deputy Commissioner Of Income Tax, Acit/ Dcit Circle2, Cr Building, Opp. Sessions Court, Jaipur Road, Ajmer,Rajasthan

[2025:RJ-JP:7695-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 7702/2023 Shree Cement Limited, Having Its Office At Bangur Nagur,Andheri Deori, Masuda Road, Beawar, Ajmer- 305901, RajasthanThrough Its Joint President Shri Arvind Khicha S/o Shri IndermalKhicha, Aged About 58 Years R/o 5-6, Nanesh Nagar, NearJawahar Bhawan, Vinod Nagar, Beawar, Rajasthan- 305901. ----Petitioner Versus 1. The Deputy Commissioner Of Income Tax, Acit/ Dcit Circle2, Cr Building, Opp. Sessions Court, Jaipur Road, Ajmer,Rajasthan-305001.2, Cr Building, Opp. Sessions Court, Jaipur Road, Ajmer,Rajasthan-305001. 2. The Principal Commissioner Of Income Tax, Udaipur,Rajasthan-313002.Rajasthan-313002. ----Respondents For Petitioner(s) : Mr. Sanjay Jhanwar, Sr. Adv. assisted by Mr. Rajat Sharma &Mr. Akshay Sharmaassisted by Mr. Rajat Sharma &Mr. Akshay SharmaFor Respondent(s): Mr. Siddharth Bapna with Mr. Mehyul MittalMr. Mehyul Mittal HON'BLE MR. JUSTICE AVNEESH JHINGAN HON'BLE MR. JUSTICE ASHUTOSH KUMAROrder 20/02/2025 -AVNEESH JHINGAN, J. : 1.This petition is filed seeking quashing of the order dated17.04.2023 passed under Section 148-A(b) of the Income Tax Act,1961 (for short ‘the Act’). 2.The relevant facts are that the petitioner-Company filed thereturns for the Assessment Year 2019-2020. A notice dated27.03.2023 under Section 148-A(b) was issued annexing thereasons for initiating reassessment proceedings. The petitioner filed objections dated 11.04.2023 filed by petitioner were rejectedvide order dated 17.04.2023. Hence, the present petition. 3.Learned senior counsel for the petitioner submits that theinitiation of the reassessment proceedings is on the basis ofsuspicion. In the chain made out by the Investigation Wing,relying upon the information from the Goods and Services Taxdepartment, the transactions by one of the dealers was founddoubtful.The contention is that there is no material for initiatingthe reassessment proceedings. 3.1The grievance is that the petitioner in the objections hadspecifically stated that the information received by the departmentis wrong. As per the department, petitioner made purchases fromMr. Saswata Bhattacharya of Rs.1,45,45,088/- and ofRs.10,23,309/- from Mr. Sunil Sharma, whereas as per returns ofthe petitioner, the purchases were of Rs.8,26,000/- (includingGST) from Mr. Saswata Bhattacharya and Rs.9,66,912/- (includingGST) from Mr. Sunil Sharma. 3.2The argument is that the material relied upon by thedepartment for arriving at the figures mentioned in the notice wasdemanded but without supplying the material and dealing with theobjections raised, the impugned order passed. 4.Learned counsel for the respondents submits that theinformation was received from the Investigation Wing and thefigures were taken from the inside portal. Provisions & Guidelines: Section 148A: [Conducting inquiry, providing opportunitybefore 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 priorapproval of specified authority, with respect to theinformation which suggests that the incomechargeable to tax has escaped assessment; (b) provide an opportunity of being heard to theassessee,[***], by serving upon him a notice toshow cause within such time, as may be specifiedin the notice, being not less than seven days andbut not exceeding thirty days from the date onwhich such notice is issued, or such time, as maybe extended by him on the basis of an applicationin this behalf, as to why a notice under section 148should not be issued on the basis of informationwhich suggests that income chargeable to tax hasescaped assessment in his case for the relevantassessment year and results of enquiry conducted,if any, as per clause (a); (a) conduct any enquiry, if required, with the priorapproval of specified authority, with respect to theinformation which suggests that the incomechargeable to tax has escaped assessment; (b) provide an opportunity of being heard to theassessee,[***], by serving upon him a notice toshow cause within such time, as may be specifiedin the notice, being not less than seven days andbut not exceeding thirty days from the date onwhich such notice is issued, or such time, as maybe extended by him on the basis of an applicationin this behalf, as to why a notice under section 148should not be issued on the basis of informationwhich suggests that income chargeable to tax hasescaped assessment in his case for the relevantassessment year and results of enquiry conducted,if any, as per clause (a); (c) consider the reply of assessee furnished, ifany, in response to the show-cause notice referredto in clause (b); (d) decide, on the basis of material available onrecord including reply of the assessee, whether ornot it is a fit case to issue a notice under section148, by passing an order, with the prior approvalof specified authority, within one month from theend of the month in which the reply referred to inclause (c) is received by him, or where no suchreply is furnished, within one month from the endof the month in which time or extended timeallowed to furnish a reply as per clause (b)expires: Providedthat the provisions of this section shall notapply in a case where,- (a) a search is initiated under section 132orbooks of account, other documents or any assetsare requisitioned under section 132Ain the case ofthe assessee on or after the 1st day of April, 2021;or (b) the Assessing Officer is satisfied, with theprior approval of the Principal Commissioner orCommissioner that any money, bullion, jewelleryor other valuable article or thing, seized in asearch under section 132or requisitioned undersection 132A, in the case of any other person onor after the 1st day of April, 2021, belongs to theassessee; or (c) the Assessing Officer is satisfied, with the priorapproval of the Principal Commissioner orCommissioner that any books of account ordocuments, seized in a search under section 132or requisitioned under section 132A, in case of anyother person on or after the 1st day of April, 2021,pertains or pertain to, or any informationcontained therein, relate to, the assessee; or (d) the Assessing Officer has received anyinformation under the scheme notified undersection 135A pertaining to income chargeable totax escaping assessment for any assessment yearin the case of the assessee.] Explanation.—For the purposes of this section,specified authority means the specified authorityreferred to in section 151.] [Prior approval for assessment, reassessment orrecomputation in certain cases.” Relevant clauses of guidelines dated 01/08/2022 forissuance of notice u/s 148 of the Act. xxxxxxxxxxxxxxxxxxxxxx “iv.The “specified authority” for the seekingapproval for conducting enquiry u/s 148A(a), passingorder u/s 148A(d) and issuance of notice u/s 148shall be: v. Explanation 2 to section 148 of the Act providesthat if a survey u/s 133A of the Act (other than undersection 133A (2A)) was conducted in the case of theassessee on or after 1 April, 2021, the Assessingofficer shall be deemed to have information which suggests that income chargeable to tax has escapedassessment. However, it is to clarify that the dueprocedure as prescribed u/s 148A needs to befollowed in such cases also before issuing a notice u/s148 of the Act. (refer proviso to section 148A). vi.The AO shall, if required, undertake enquirieson any "information" received/available with himwhich suggests that the income chargeable to tax hasescaped assessment in a previous year only with thepriorapprovalof "specifiedauthority". v. Explanation 2 to section 148 of the Act providesthat if a survey u/s 133A of the Act (other than undersection 133A (2A)) was conducted in the case of theassessee on or after 1 April, 2021, the Assessingofficer shall be deemed to have information which suggests that income chargeable to tax has escapedassessment. However, it is to clarify that the dueprocedure as prescribed u/s 148A needs to befollowed in such cases also before issuing a notice u/s148 of the Act. (refer proviso to section 148A). vi.The AO shall, if required, undertake enquirieson any "information" received/available with himwhich suggests that the income chargeable to tax hasescaped assessment in a previous year only with thepriorapprovalof "specifiedauthority". vii. If the result of enquiry/information availablesuggests that the income chargeable to tax hasescaped assessment, the AO shall provide anopportunity of being heard to the assessee by issuinga show cause notice u/s 148A(b) of the Act. The saidnotice shall provide between 7 to 30 days' time to theassessee for submitting the reply. A template of showcause notice is enclosed at Annexure-A1 viii. If an assessee requests for a personal hearing,the same may be dealt with following the principle ofnatural Justice by giving a reasonable period forcompliance of notice specifying the date of hearing. ix. As per 3rd proviso to section 149, for thepurposes of computing the period of limitation as perthis section, the time or extended time allowed to theassessee, as per show-cause notice issued underclause (b) of section 148A or the period during whichthe proceeding under section 148A is stayed by anorder or injunction of any court, shall be excluded. x. Further as per 4th proviso to Section 149, whereimmediately after exclusion of the period referred toin the immediately preceding proviso (i.e. 3rdproviso), the period of limitation available to theAssessing Officer for passing an order under clause(d) of Section 148A is less than seven days, suchremaining period shall be extended to seven daysand the period of limitation under this sub-sectionshall be deemed to be extended accordingly. xi. The AO has to consider the reply of assesseefurnished, if any, in response to the show causenotice referred to in clause(b) of Section 148A beforepassing the order u/s 148A(d). xii. The AO shall mandatorily pass a speaking orderu/s 148A(d) in all cases with the 'prior approval of'-the specified authority(AnnexureA2) for such orderu/s. 148A(d), expect in the cases covered in Para 2.1 (iii) above of these guidelines, irrespective of whetherissuance of notice u/s 148 is being recommended ornot. A template of such order u/s. 148A(d) is-enclosed at AnnexureA3. xiii. Once an order under clause(d) of Section 148Ahas been passed, no further approval is required forissuance of notice u/s 148 by the AO, with effectfrom 1.4.2022.* (* except for cases in which procedure under Section 148A is being applied for implementation of the Hon’ble Supreme Court’sjudgment in the case of UOI Vs. Ashish Agarwal (2022 SCC OnlineSC 543) dated 4.5.2022 for which specific instruction dated 11.5.2022 has been issued”). Annexure-A1 is reproduced hereinbelow:- GOVERNMENT OF INDIAMINISTRY OF FINANCEINCOME TAX DEPARTMENTOFFICE OF THE --------------(Designation of AO along with Office address) To, Notice under clause (b) of Section 148A of the-Incometax Act, 1961 Sir/Madam/M/s xiii. Once an order under clause(d) of Section 148Ahas been passed, no further approval is required forissuance of notice u/s 148 by the AO, with effectfrom 1.4.2022.* (* except for cases in which procedure under Section 148A is being applied for implementation of the Hon’ble Supreme Court’sjudgment in the case of UOI Vs. Ashish Agarwal (2022 SCC OnlineSC 543) dated 4.5.2022 for which specific instruction dated 11.5.2022 has been issued”). Annexure-A1 is reproduced hereinbelow:- GOVERNMENT OF INDIAMINISTRY OF FINANCEINCOME TAX DEPARTMENTOFFICE OF THE --------------(Designation of AO along with Office address) To, Notice under clause (b) of Section 148A of the-Incometax Act, 1961 Sir/Madam/M/s 1. Whereas I have information which suggests thatincome chargeable to tax for the Assessment Year__________ has escaped assessment within themeaning of Section 147 of the Income Tax Act, 1961.The details of the information/enquiry conducted onwhich reliance is being placed, along with supportingdocuments, are enclosed with this notice.2. You are required to show-cause as to why, inview of the details contained in enclosures mentionedin point number 1 above, a notice under Section 148of the Income Tax Act, 1961 should not be issued.3.You may submit your reply to this notice, alongwith supporting documents (if any) on the abovementioned issues on or before _______ electronicallyat www.incometax.gov.in. Guidelines for Enclosures •The AO should enclose copy of all the relevant‘information’ available on which reliance is beingplaced, along with supporting documents (if any).•In the cases where information is received fromthe investigation wing or any other law enforcementagency, details of letter, brief summary of informationalong with relevant portion of such report and detailsof relied upon documents may be enclosed. Such aportion as does not bear reference to the assesseeconcerned may be appropriately redacted. •Details of enquiry conducted, if any, may beshared if reliance is being placed by the AO on it.•Judicial order (i.e., case laws) on which relianceis being placed, if any. Refer Explanation 1 and Explanation 2 of Section 148for what constitutes “information”. Analysis and Conclusion: 5.Section 148A of the Act stipulates that before initiating theproceedings under Section 148 of the Act, with prior approval ofthe specified authority the A.O. if so required, may conduct anenquiry with regard to the information suggesting escapedassessment. The assessee is to be provided an opportunity ofhearing by issuing notice specifying the date of not less thanseven days but not exceeding thirty days, which may be extendedon application. The information relied upon for reassessment andoutcome of enquiry if conducted any, is to be supplied. In case ofinformation having been received from investigating wing or otheragency, brief summary of information along with relevant portionof report and details of documents relied upon is to be supplied.The decision that if it is a fit case for issuance of notice underSection 148 is to be taken with prior approval of the specifiedauthority, on the basis of material available on record and afterconsidering the reply filed by the assessee. The order is to bepassed within one month from ending of the month when reply was filed and in case no reply was filed within one month from endof month when time to file reply expires. 6.The proviso to Section 148A of the Act provides exception tothe applicability of Section 148A of the Act.” 7.From perusal of the impugned order, it is forthcoming thatthe objections raised by the petitioner-Company have not beendealt with. The request for supplying the material was notconsidered. 8. The impugned order is set aside and the matter is remittedback to respondent No.1 to pass the order afresh after dealingwith the objections raised by the petitioner. The writ petition isallowed. was filed and in case no reply was filed within one month from endof month when time to file reply expires. 6.The proviso to Section 148A of the Act provides exception tothe applicability of Section 148A of the Act.” 7.From perusal of the impugned order, it is forthcoming thatthe objections raised by the petitioner-Company have not beendealt with. The request for supplying the material was notconsidered. 8. The impugned order is set aside and the matter is remittedback to respondent No.1 to pass the order afresh after dealingwith the objections raised by the petitioner. The writ petition isallowed. 9.In order to avoid further delay, let petitioner through hisrepresentative appear in the office of the respondent No.1 on05.03.2025 at 11:00 A.M. (ASHUTOSH KUMAR),J (AVNEESH JHINGAN),J RIYA /AARZOO ARORA /35 Whether Reportable: Yes