Pradeep Kumar Varshney v. Income Tax Officer Ward 71(3), Delhi

$~1 IN THE HIGH COURT OF DELHI AT NEW DELHI +W.P.(C) 7115/2022 & CM APPLs.21850-21851/2022 PRADEEP KUMAR VARSHNEY..... Petitioner Through:Mr. Amol Sinha, Mr. Nitin Gulati,Mr. Sushant Sarkar, Mr. AshviniKumar, Mr. Rajiv Shankar Dvivediand Mr. Rishabh Jain, Advocates. versus INCOME TAX OFFICER WARD 71(3), DELHI..... Respondent Through:Mr.Sunil Agarwal with Mr. TusharGupta and Mr. Utkarsh Tiwari,Advocates. %Date of Decision: 17[th]May, 2022 CORAM:HON'BLE MR. JUSTICE MANMOHANHON'BLE MR. JUSTICE MANOJ KUMAR OHRIJ U D G M E N T MANMOHAN, J (Oral): 1.Present writ petition has been filed challenging the order dated 9[th]April, 2022 passed by the Respondent under Section 148A(d) of the IncomeTax Act, 1961 (for short ‘Act’) for the Assessment Year 2018-19 and allconsequential proceedings in pursuance thereto including issuance of thenotice dated 9[th]April, 2022 under Section 148 of the Act. 2.Learned counsel for the Petitioner states that in the present case noticeunder Section 148A is not warranted as it is a case of Section 153C of theAct to which proviso (c) of Section 148A applies. 3.Mr. Sunil Agarwal, learned counsel for the Respondent has broughton record the instructions received by him by way of email dated 13[th]May,2022. The said email is reproduced as under:- “To, Sh. Sunil Aggarwal Senior Standing Counsel, High Court4[th]Floor, 15 Link Road, Jangpura Extension,New Delhi Sir, Sub: Writ Petition (C) 7115 of 2022 in the matter of PradeepKumar Varshney (PAN ) for A.Y. 2018-19-reg. Kindly refer to your email dated 12.05.2022 wherein it hasbeen directed to verify and apprise the correct position in the abovecase regarding re-opening the case u/s 148 of the I.T. Act, 1961. In this regard, correct position in this case is as under: 1. In this case, the information was received, in accordancewith the Risk Management Strategy formulated by CBDT, oninsight portal of Income Tax Department, under the categoryHigh Risk CRU/VRU information system. 2. As per information received in this case, it was noted that asearch was conducted in the case of Sangini Group of Surat on03.12.2021. After verification of the seized material foundduring search proceedings, it was noticed that some personshave made cash payments with Sangini Corporation and M/sNandkishore Corporation. The assessee's name i.e Sh. PradeepKumar Varshney is also in the list of persons who have madeon money to M/s Nand Kishore Corporation. The assessee hadpaid on money of Rs. 75,34,000/- in cash for purchasing a shopin Sangini Textile Hub-A from Nandkishore Corporation duringthe A.Y. 2018-19 (F.Y. 2017-18). 3. As per explanation 1 to Section 148 which states as under: Explanation 1-For the purposes of this section and section148A, the information with the Assessing Officer which suggests thatthe income chargeable to tax has escaped assessment means: (i) Any information flagged in the case of the assessee for the relevantassessment year with the risk management strategy formulated by theBoard from time to time. (ii) Any final objection raised by the Comptroller and AuditorGeneral of India to the effect that the assessment in the case of theassessee for the relevant assessment year has not been made inaccordance with the provisions of this Act. Hence, considering the information received under the categoryclause (i) of Explanation of the section 148, the proceedings in this casewere initiated u/s 148A and show cause notice under clause (b) of section148A of the I.T. Act, 1961 was issued with the prior approval of the specifiedauthority on 24.03.2022. The assessee submitted reply to the show causenotice on 07.04.2022, which was considered u/s 148A(c) of the I.T. Act,1961 and thereafter, notice u/s 148 was issued on 09.04.2022 along withpassing a order u/s 148A(d) of the I.T. Act, 1961. Sir, the above is the correct and factual position in this case. Yours faithfully,(Subhash Chand)Income Tax officerWard-71(3), New Delhi” Hence, considering the information received under the categoryclause (i) of Explanation of the section 148, the proceedings in this casewere initiated u/s 148A and show cause notice under clause (b) of section148A of the I.T. Act, 1961 was issued with the prior approval of the specifiedauthority on 24.03.2022. The assessee submitted reply to the show causenotice on 07.04.2022, which was considered u/s 148A(c) of the I.T. Act,1961 and thereafter, notice u/s 148 was issued on 09.04.2022 along withpassing a order u/s 148A(d) of the I.T. Act, 1961. Sir, the above is the correct and factual position in this case. Yours faithfully,(Subhash Chand)Income Tax officerWard-71(3), New Delhi” 4.In response to a pointed query, Mr. Sunil Agarwal, learned counselfor the Revenue admits that the case of the petitioner falls under Section153C of the Act. 5.Consequently, this Court is of the view that the present case involvesinterpretation of Section 148A of the Act. The relevant portion of the saidsection is reproduced hereinbelow:- “148A. The Assessing Officer shall, before issuing any noticeunder section 148,— (a) conduct any enquiry, if required, with the prior approval ofspecified authority, with respect to the information whichsuggests that the income chargeable to tax has escapedassessment; (b) provide an opportunity of being heard to the assessee, withthe prior approval of specified authority, by serving upon him anotice to show cause within such time, as may be specified inthe notice, being not less than seven days and but not exceedingthirty days from the date on which such notice is issued, or suchtime, as may be extended by him on the basis of an applicationin this behalf, as to why a notice under section 148 should notbe issued on the basis of information which suggests thatincome chargeable to tax has escaped assessment in his casefor the relevant assessment year and results of enquiryconducted, if any, as per clause (a); (c) consider the reply of assessee furnished, if any, in responseto the show-cause notice referred to in clause (b); (d)decide, on the basis of material available on recordincluding reply of the assessee, whether or not it is a fit case toissue a notice under section 148, by passing an order, with theprior approval of specified authority, within one month fromthe end of the month in which the reply referred to in clause (c)is received by him, or where no such reply is furnished, withinone month from the end of the month in which time or extendedtime allowed to furnish a reply as per clause (b) expires: Provided that the provisions of this section shall not apply in acase where,— xxxxxxxxxxxx (c) the Assessing Officer is satisfied, with the prior approvalof the Principal Commissioner or Commissioner that any booksof account or documents, seized in a search under section132 or requisitioned under section 132A, in case of any otherperson on or after the 1[st]day of April, 2021, pertains or pertainto, or any information contained therein, relate to, the assessee. Explanation.—For the purposes of this section, specifiedauthority means the specified authority referred to in section151.]” 6.Since the case of the petitioner is admittedly covered by proviso (c) toSection 148A, this Court is of the view that the impugned order and noticeare untenable in law. Accordingly, both the impugned order and notice dated9[th]April, 2022 are set aside and the matter is remanded back to theAssessing Officer to pass a fresh reasoned order in accordance with law.7.With the aforesaid direction, the present writ petition and pendingapplications stand disposed of. MANMOHAN, J MAY 17, 2022AS MANOJ KUMAR OHRI, J