Entire material available on record not required to be supplied with notice u/s 148A(b)

Supply of information u/s 148A does not necessarily mean that entire material available on record have to be supplied to the assessee.

In a recent judgment, High Court has held that supply of information u/s 148A does not necessarily mean that copies of the entire material available on record have to be supplied to the assessee along with notice under Section 148A(1) or 148A(b) of the Income Tax Act.

ABCAUS Case Law Citation:
5039 (2026) (02) abcaus.in HC

In the instant case, the Assessee/Petitioner had challenged the proceedings initiated by the Assessing Officer (AO) vide notice under Section 148A(b) of the Income Tax Act, 1961 (the Act).

In the first round of litigation the Hon’ble High Court had quashed the earlier order passed under Section 148A(d) of the Act and set aside the matter to AO for deciding fresh. The Hon’ble High Court had given liberty to the petitioner/assessee to respond to the notice issued under Section 148A(b) of the Act. It was also directed that the AO shall consider the response of the petitioner and pass a fresh order

The Petitioner invited Court’s attention towards the original notice u/s 148A(b) and the reasons recorded therein. It was argued that in the said notice a passing reference had been made to transactions as bogus sales and purchases and no details or information was given by the AO about the said transactions.

It was submitted that when the subsequent letter was issued, the AO did not provide any further details about the allegations and suddenly, name of the supplier qua one purchase transaction had been changed.

It was argued that while initiating the proceedings afresh and issuing notice, the AO had not only changed the name of the party involved in the alleged transaction but also ignored the binding directions passed by High Court in petitioner’s earlier writ petition.

It was argued that if the scheme of the provision contained in Section 148 of the Act is taken into consideration, it is apparent that it speaks of providing the information to the assessee and unless the details or information in relation to the transaction is provided to the noticee or the assessee, it cannot be expected of the assessee to give a reply and satisfy the Assessing Officer that no income has escaped assessment.

It was also argued that the proceedings were based on no material and the inquiry being conducted by the AO was a fishing and roving inquiry, which is impermissible in law within the parameters laid down under Section 148 of the Act. 

On the other hand the Revenue contended that the earlier order passed under Section 148A(d) of the Act of 1961 was quashed by the High Court but the basic notice issued under Section 148A(b) was not touched by the Court, rather it remained as it was. It was submitted that the High Court on earlier occasion consciously affirmed the invocation of powers of re-assessment.

The Hon’ble High Court observed that so far as the petitioner’s basic contention that while issuing notice, the AO had not provided relevant information to the petitioner was concerned, the Annexure to notice u/s 148A(b) reveals that reference to two figures was given on the ground of bogus purchases. Simply because names of parties had been mentioned without specifically mentioning about the concern or entity with whom the petitioner had allegedly dealt with, it cannot be said that the reasons recorded or the information provided are not sufficient.

The Hon’ble High Court opined that a perusal of sub-section (1) of Section 148A of the Act (as it stood before the amendment vide Finance Act, 2021) reveals that it simply provides for information suggesting income chargeable to tax has escaped assessment is to be supplied along with the notice.

The Hon’ble High Court opined that the Information means a concise narration or detail about the conclusion or inference, which the AO has drawn from the material available with him. Such views is fortified, from the provision contained in sub-section (3) of Section 148A of the Act where the legislation has used the expression “on the basis of material available on record. A reading of sub-section (3) of Section 148 of the Act make it apparent that the law has carved out a clear distinction between the material available on record and the information to be supplied.

The Hon’ble High Court held that supply of information does not necessarily mean that copies of the entire material available on record have to be supplied to the petitioner or assessee along with notice under Section 148A(1) or 148A(b), as the case may be. If the argument of the petitioner as advanced is accepted and it is held that every material has to be supplied to the assessee along with the notice under Section 148A(1) or Section 148A(b) (as applicable from time to time), it will result in protraction of the proceeding and giving assessee unwarranted opportunity to defend the transactions, which he had withheld while filing the return of income by way of getting the relevant material or defence manufactured.

Accordingly, the petition was dismissed there being no jurisdictional error in the impugned notice u/s 148A(b) of the Act.

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