Court sets aside order and notice under Section 148A, remands for fresh assessment.

The Court set aside the order and notice issued under Section 148A of the Income Tax Act, 1961 for Assessment Year 2018-19, finding them legally unsustainable as the case fell under Section 153C. The matter was remanded to the Assessing Officer for a fresh reasoned order in compliance with the law. The Court emphasized the importance of adhering to procedural requirements in issuing notices under the Income Tax Act, providing clarity on the application of Section 148A.

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Issues Involved:
Challenge to order under Section 148A of the Income Tax Act, 1961 for Assessment Year 2018-19 and consequential proceedings.

Analysis:
1. The petitioner challenged the order dated 9th April, 2022, passed by the Respondent under Section 148A(d) of the Income Tax Act, 1961, for the Assessment Year 2018-19, along with all consequential proceedings, including the notice issued under Section 148 of the Act. The petitioner contended that the notice under Section 148A was not warranted as the case fell under Section 153C of the Act, to which proviso (c) of Section 148A applies.

2. The Respondent, through learned counsel Mr. Sunil Agarwal, presented instructions received via email, detailing the initiation of proceedings under Section 148A based on information received through the Risk Management Strategy of the CBDT. The information indicated the petitioner's involvement in cash payments related to a search conducted in another case. The Respondent admitted that the petitioner's case falls under Section 153C of the Act.

3. The Court noted that the case involves the interpretation of Section 148A of the Act, which outlines the procedure for issuing notices under Section 148. The relevant provisions of Section 148A were discussed, emphasizing the requirement for conducting an enquiry, providing an opportunity of being heard to the assessee, considering the reply furnished, and deciding whether to issue a notice under Section 148.

4. As the case of the petitioner fell under proviso (c) of Section 148A, the Court concluded that the impugned order and notice were legally unsustainable. Consequently, both the order and notice dated 9th April, 2022, were set aside, and the matter was remanded back to the Assessing Officer to pass a fresh reasoned order in compliance with the law.

5. The Court disposed of the writ petition and pending applications in light of the above decision, providing clarity on the application of Section 148A and the necessity for adherence to procedural requirements in issuing notices under the Income Tax Act, 1961.

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