Court quashes order under Section 148A, emphasizes proper objection consideration. Remitted for fresh review.

The court quashed the order passed under Section 148A(d) and the notice issued under Section 148, directing the Assessing Officer to reconsider the objections raised by the assessee. The court emphasized the importance of the AO properly considering and addressing all objections in a meaningful manner, in accordance with the procedural requirements under Section 148A. The matter was remitted back to the AO for fresh consideration within three months, highlighting the necessity of strict adherence to procedural requirements to ensure a meaningful application of the law.

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Issues Involved:
1. Validity of reopening assessment under Section 148A of the Income Tax Act, 1961.
2. Consideration of objections raised by the assessee against the reopening notice.
3. Compliance with procedural requirements under Section 148A.

Issue-wise Detailed Analysis:

1. Validity of Reopening Assessment under Section 148A:
The writ applicant sought to quash the impugned notices and orders under Section 148A of the Income Tax Act, 1961, arguing that the transactions in question were either already disclosed or pertained to a separate entity, the HUF. The court noted that the Assessing Officer (AO) issued the notice under Section 148A based on undisclosed transactions in the Social Cooperative Bank Ltd. accounts, which suggested an income escapement of Rs.1,80,41,71,133/- for the Assessment Year 2018-19. The AO's decision to reopen the assessment was based on the belief that these transactions were not reflected in the assessee’s return of income.

2. Consideration of Objections Raised by the Assessee:
The assessee filed detailed objections under Section 148A(b), asserting that all transactions, except those related to the HUF, were recorded in the audited books of accounts and reflected in the return of income. The AO, however, dismissed these objections, stating that the documentary evidence provided by the assessee was insufficient to explain the transactions and the related income. The court found that the AO did not properly consider the objections raised by the assessee, which is a statutory obligation under Section 148A(c).

3. Compliance with Procedural Requirements under Section 148A:
The court emphasized the procedural requirements under Section 148A, which mandates the AO to consider the assessee’s reply and decide whether it is a fit case to issue a notice under Section 148. The court noted that the AO failed to apply his mind to the objections raised by the assessee, rendering the order under Section 148A(d) an empty formality. The court referenced its previous decision in Divya Jyoti Diamonds (P) Ltd. vs. Income Tax Officer, highlighting that the AO must deal with each objection and provide proper reasons, reflecting a meaningful application of mind.

Judgment:
The court quashed and set aside the order passed under Section 148A(d) and the notice issued under Section 148, remitting the matter to the AO for fresh consideration of the objections. The AO was directed to apply his mind and pass an appropriate order under Section 148A(d), dealing with all objections in its true sense. This exercise was to be completed within three months from the receipt of the court's order. The writ application was thus disposed of, with the court emphasizing the need for strict adherence to the procedural requirements under the new regime of Section 148A to ensure it is meaningful.

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