DINESH KUMAR S/O SHRI HARI RAM V. THE DEPUTY COMMISSIONER OF INCOME TAX

CW/6407/2023

AI Insights

The case involves Dinesh Kumar, the petitioner, who challenged an order under Section 148A(d) of the Income Tax Act, 1961, concerning the assessment year 2019-2020. The dispute arose from a notice issued by the Income Tax Department based on alleged information about the purchase of immovable property by the petitioner, which he denied. The petitioner argued that his response was not considered and the necessary documents were not provided, leading to a mechanical order being passed. The respondents contended that the notice was issued based on the information available with the Department. The court examined whether the procedural requirements under Section 148A were met.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 747390 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 04-11-2024
• Assessment Year: misc
• Other Referred Cases: Union of India Vs. Ashish Agarwal
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: SHANTANU SHARMA; PARTH VAHISHTHA
• Assessee Lawyers: SHAFI MOHAMM A D CHOUHAN
• Keywords: Assessment year 2019-2020; Income Tax Return; Mechanical Order; Notice under section 148A; Procedural violation; Quashing of order; Reply not considered
• Section: 148; 148A(d); 148A

Judgement Text

"[2024:RJ-JP:45536-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 6407/2023 Dinesh Kumar S/o Shri Hari Ram, Resident Of Village Hardayalpura, Piprali, Distt. Sikar-332027 (Rajasthan) ----Petitioner Versus 1. The Deputy Commissioner Of Income Tax, (International Taxation) Room No. 413, 4Th Floor, Jeevan Nidhi-2, Lic Building, Ambedkar Circle, Jaipur-302005 (Rajasthan) 2. Commissioner Of Income Tax (International Taxation), Delhi-I, 3Rd Floor, Room No. 317, E-2, Block, Dr. S.p. Mukherjee Civic Centre, Minto Road, New Delhi-110002 ----Respondents For Petitioner(s) : Mr. Shafi Mohammad Chouhan For Respondent(s) : Mr. Shantanu Sharma with Mr. Parth Vahishtha HON'BLE MR. JUSTICE AVNEESH JHINGAN HON'BLE MR. JUSTICE UMA SHANKER VYAS Order 04/11/2024 AVNEESH JHINGAN, J(Oral):- 1. This petition is filed seeking quashing of the order dated 07.04.2023 passed under Section 148A(d) of the Income Tax Act, 1961 (for short “the Act”). 2. The brief facts are that the petitioner filed income tax return pertaining to assessment year 2019-2020. A notice dated 20.03.2023 was issued under Section 148A of the Act on the basis of information available in form 26AS/AIR of purchase of an immovable property during the assessment year 2019-2020. The petitioner responded to the notice by stating that no property was purchased by the petitioner during the relevant year, the [2024:RJ-JP:45536-DB] (2 of 4) [CW-6407/2023] information in form 26AS/AIR was wrong and not relating to the petitioner. The material relied upon by the Department vis-a-vis the purchase of immovable property by the petitioner was sought to enable the petitioner to file the reply. The order under Section 148A(d) of the Act dated 07.04.2023 was passed holding it a fit case for issuance of notice under Section 148 of the Act. 3. Learned counsel for the petitioner submits that the reply filed by the petitioner was not considered, the document and the material available with the Department have not been supplied. The impugned order was passed mechanically and in Para-3 it was stated that no reply was filed by the petitioner whereas, it is an admitted case that the reply was filed. 4. Learned counsel for the respondent submits that on the basis of information available with the Department, notice was issued. 5. The issue is whether the procedure prescribed under Section 148A of the Act has been followed in the present case. In other words, the A.O. while passing the impugned order has considered the material on record, the replies filed and passed a speaking order. 6. By Finance Act, 2021, Sections 147 to 151 of the Act were substituted. Section 148A of the Act was inserted streamlining the procedure for initiation of proceedings under Section 148 of the Act. 7. The Central Board of Direct Taxes (for short ‘CBDT’) after the decision in Union of India Vs. Ashish Agarwal (supra) on 01/08/2022 issued guidelines for issuance of notice under Section 148 of the Act. [2024:RJ-JP:45536-DB] (3 of 4) [CW-6407/2023] 8. From the language of Section 148A of the Act and the guidelines, it is clear that before initiating the proceedings under Section 148 of the Act, with prior approval of the specified authority, the A.O. if so, required may conduct an enquiry with regard to the information suggesting escaped assessment. The assessee is to be provided an opportunity of hearing by issuing notice specifying the date of not less than sevem days but not exceeding thirty days, which may be extended on application. The information relied upon for reassessment and outcome of enquiry if conducted any, is to be supplied. In case of information having been received from investigating wing or other agency, brief summary of information along with relevant portion of report and details of documents relied upon is to be supplied. The decision as to if it is a fit case for issuance of notice under Section 148 is to be taken with prior approval of the specified authority, on the basis of material available on record and considering the reply filed by the assessee. The order is to be passed within one month from ending of the month when reply was filed and in case no reply was filed within one month from end of month when time to file reply expires. 9. The proviso to Section 148A of the Act provides exception to the applicability of Section 148A of the Act. 10. In the guidelines, enclosures obligate the Assessing Officer to enclose copy of the relevant information being relied upon along with the supported documents, if any. 11. In the case in hand while passing the order under Section 148A(d), it was recorded that the petitioner has not filed reply to [2024:RJ-JP:45536-DB] (4 of 4) [CW-6407/2023] the show-cause notice (for short 'SCN'), though it is admitted case that the reply was filed. The conclusion arrived at was that the assessee has not furnished the requisite details and supporting documents in pursuance to the SCN and it was presumed that the petitioner had no details or explanation to offer in respect of the information with the Department. 12. It was not considered that there was denial by the petitioner of transaction-in-question and the copy of form 26AS/AIR was enclosed to show that there was no transaction by the assessee of purchase of immovable property during the relevant assessment year. 13. Without considering the reply and providing the material available with the Department, the impugned order was passed. The order being in violation of the procedure prescribed under Section 148A of the Act and guidelines dated 01.08.2022, is set aside and the matter is remitted back to the respondent No.1 to proceed in pursuance to SCN in accordance with law. 14. The writ petition is allowed. (UMA SHANKER VYAS),J (AVNEESH JHINGAN),J Riya/Sachin/90 Whether Reportable: Yes "