Court Orders Counter Affidavits in Tax Assessment Case

The court directed the respondents to file counter affidavits within three days, warning of possible exemplary costs for non-compliance. The case was scheduled for a fresh hearing, with proceedings related to the notice under Section 148 for Assessment Year 2018-19 stayed until the next hearing. The judgment stressed the necessity of due process and proper grounds for issuing notices under Section 148A, emphasizing fairness and adherence to legal procedures in tax assessments.

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Issues:
Challenge to impugned order under Section 148A(d) for Assessment Year 2018-19.

Analysis:
The petitioner filed a writ petition seeking the quashing of the impugned order dated 31.3.2022 passed by the assessing authority under Section 148A(d) for the Assessment Year 2018-19, along with the notice under Section 148 dated 31.03.2022. The impugned notice was issued based on the purchase of an immovable property exceeding a certain amount. The petitioner responded by explaining the nature and source of the transaction, providing detailed payment information and submitting a copy of the registered sale deed. Despite the petitioner's explanation and evidence, the assessing authority passed the impugned order under Section 148A(d) arbitrarily and without proper grounds, not in alignment with the information provided by the petitioner.

The court highlighted the provisions of Section 148A of the Income Tax Act, 1961, which empower the Assessing Officer to conduct an inquiry before issuing a notice under Section 148 in cases where income chargeable to tax has escaped assessment. Section 148A mandates the Assessing Officer to provide the assessee with an opportunity to show cause before deciding whether to issue a notice under Section 148 based on the available information. The order under Section 148A(d) should be passed by the Assessing Authority with reference to the information received during the inquiry process.

In light of the circumstances, the court directed the respondents to file counter affidavits within three days, with a warning that failure to comply may result in the imposition of exemplary costs. The case was scheduled for a fresh hearing on a specified date. As an interim measure, the court ordered a stay on proceedings related to the notice under Section 148 dated 31.3.2022 for the Assessment Year 2018-19 until the next hearing date. The judgment emphasized the importance of following due process and proper grounds for issuing notices under Section 148A, ensuring fairness and adherence to legal procedures in tax assessments.

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