Order u/s 148A(d) quashed for non furnishing vital information to assessee to rebut allegation of escapement of income
In a recent judgment, the Hon’ble Allahabad High Court has set aside order passed u/s 148A(d) holding that when vital information was not furnished to assessee, due compliance of Section 148A of the Act was not made.
ABCAUS Case Law Citation:
ABCAUS 4059 (2024) (05) HC
In the instant case, the Petitioner assessee had challenged the notice issued u/s 148A(b) of the Income Tax Act, 1961 (the Act) and the order passed u/s 148A(d) of the Act and notice u/s 148 of the Act issued/passed by Income Tax Department.
The Petitioner submitted that information was received by the revenue of unaccounted cash entries made in the bank accounts of the petitioner by four entities.
According to the Petitioner in response to notice u/s 148A(b), he had offered explanation with respect to each of the above four depositors. However reassessment proceeding being initiated solely on the strength of information received with respect to deposits made by one entity.
It was the case of the Petitioner that respect to the said entity, he had disputed any transaction performed by such entity involving deposits of any cash in the petitioner’s bank account. It was further case that all bank transactions of the petitioner had been examined in the scrutiny assessment Therefore, no material existed to suggest that any income has escaped assessment at the hands of the petitioner.
AT the time of admission of the Petition, the Hon’ble High Court observed that fact were not very clear from the reading of the notice issued under Section 148(A)(b) and the order passed under Section 148 (A)(d) of the Act.
Before the Hon’ble High Court the Revenue submitted that there was survey in the case of said entity and other entities (not involving the petitioner). In that information had been received, that money has been brought by said entity to the petitioner’s bank account through another party.
The Hon’ble High Court observed that the vital information was not furnished to the petitioner. By means of a notice issued dated under Section 148A(b) of the Act, the only information furnished to the petitioner was with respect to cash deposits received in his bank account from the said entity. The other receipts with respect to which notice was issued were not disputed by the revenue. To that extent, the explanation furnished by the petitioner had been accepted.
The Hon’ble High Court opined that since, the petitioner was not confronted with the information that he had received cash deposits from a third party, the petitioner was not granted opportunity to rebut the same. Seen in that light, due compliance of Section 148A of the Act had not been made, inasmuch as the notice issued to the petitioner under Section 148A(b) of the Act was not complete.
Accordingly, the Hon’ble High Court set aside the order u/s 148A(d) and it was directed that petitioner may file his further objections to the notice u/s 148A(b) within a period of two weeks. Thereafter, the appropriate authority may pass fresh order under Section 148A (d) of the Act dealing with the further objection that may be raised by the petitioner.
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