Manohar Lal Paraswani And Sons Jewellers V. Union Of India and 2 Others

WTAX/1215/2022

AI Insights

The case involves Manohar Lal Paraswani And Sons Jewellers challenging an order under Section 148A Clause (d) of the Income Tax Act, 1961, which was passed by the Income Tax Officer Ward 1(1)(1), Kanpur. The petitioner argued that their reply to the notice under Section 148 was not properly considered, as the order dismissing their reply was non-specific and lacked reasoning. The court referenced the Supreme Court's decision in Union of India and Others vs. Ashish Agarwal, which highlighted the procedural safeguards under Section 148A, including the requirement for a reasoned order and the opportunity for the assessee to be heard. The court found the impugned order to be a non-speaking order and thus set it aside, remanding the matter for fresh consideration.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 803764 (HC-ALLAHABAD)
• Appeal Type: Others
• Pronouncement Date: 17-10-2022
• Assessment Year: misc
• Other Referred Cases: Union of India and Others vs. Ashish Agarwal
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: GAURAV MAHAJAN; MANU GILDIYAL
• Assessee Lawyers: ABHINAV MEHROTRA
• Keywords: Fresh consideration; Income chargeable to tax has escaped assessment; Non-speaking order; Show cause notice
• Section: 148; 148A

Judgement Text

"Court No. - 39 Case :- WRIT TAX No. - 1215 of 2022 Petitioner :- Manohar Lal Paraswani And Sons Jewellers Respondent :- Union Of India And 2 Others Counsel for Petitioner :- Abhinav Mehrotra Counsel for Respondent :- A.S.G.I.,Gaurav Mahajan Hon'ble Mrs. Sunita Agarwal,J. Hon'ble Vipin Chandra Dixit,J. Heard Sri Abhinav Malhotra, learned counsel for the petitioner and Sri Manu Gildiyal, learned counsel for respondent. The order dated 30.7.2020 passed under Section 148A Clause (d) of Income Tax Act, 1961 is subject matter of challenge in the present petition. It is demonstrated by the learned counsel for the petitioner that the reply under Section 148 of Income Tax Act, 1961 was duly submitted by the petitioner. The said reply was not duly considered and was rejected in one line by saying that the reply of the Assessee has been found not acceptable. The attention of the Court is invited to the observation made by the Apex Court in the case of Union of India and Others vs. Ashish Agarwal decided on 4.5.2022. The said decision has been placed before us which is relevant to quote hereunder:- \"6.3 But prior to pre-Finance Act, 2021, while reopening an assessment, the procedure of giving the reasons for reopening and an opportunity to the assessee and the decision of the objectives were required to be followed as per the judgment of this Court in the case of GKN Driveshafts (India) Ltd. (supra). 6.4 However, by way of Section 148 A, the procedure has now been streamlined and simplified. It provides that before issuing any notice under Section 148, the assessing officer shall (i) conduct any enquiry, if required, with the approval of specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment; (ii) provide an opportunity of being heard to the Assessee, with the prior approval of specified authority; (iii) consider the reply of the Assessee furnished, if any, in response to the showcause notice referred to in clause (b); and (iv) decide, on the basis of material available on record including reply Assessee of the , as to whether or not it is a fit case to issue a notice under Section 148 of the IT Act and (v) the AO is required to pass a specific order within the time stipulated. 6.5 Therefore, all safeguards are provided before notice under Section 148 of the IT Act is issued. At every stage, the prior approval of the specified authority is required, even for conducting the enquiry as per Section 148A(a). Only in a case where, the assessing officer is of the opinion that before any notice is issued under Section 148A(b) and an opportunity is to be given to the Assessee, there is a requirement of conducting any enquiry, the assessing officer may do so and conduct any enquiry. Thus if the assessing officer is of the opinion that any enquiry is required, the assessing officer can do so, however, with the prior approval of the specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment.\" A careful reading of the said observation about the object of insertion of Section 148A of the Act, shows that the said provision has been incorporated with a view to streamline the procedure, mandating the Assessee Officer to make an enquiry and providing opportunity of being heard. A show-cause notice is required to be furnished to the Assessee and the order under Section 148A of the Act, has to be passed on the basis of the material available on record considering the reply of the Assessee. The language of the order impugned does not disclose the mind of the adjudicating authority on the objection taken by the Assessee. As the order impugned is a non-speaking order, we do not find any reason to sustain the same. Sri Manu Gildiyal, learned counsel for respondents, however, prays for time to file counter affidavit. We may record that the reasoning given in the order has to be found from the order itself and nothing can be supplemented by way of counter affidavit. We, therefore, turn down the request of Mr. Manu Gildiyal, learned counsel for the respondent to file counter affidavit. While setting aside the order dated 30.7.2022 passed by respondent No.2 namely Income Tax Officer Ward 1(1)(1), Kanpur, we relegate the matter for fresh consideration strictly in accordance with law. In view of the above, the writ petition is disposed of. Order Date :- 17.10.2022 S.K. Digitally signed by SWEETY KANOJIA Date: 2022.10.21 13:32:52 IST Reason: Location: High Court of Judicature at Allahabad "