Court upholds Assessing Officer's notice, dismisses petition due to lack of evidence. Petitioner's transaction explanation insufficient.

The court dismissed the writ petition and application, upholding the validity of the notice dated 23rd June 2022 issued by the Assessing Officer (AO). The court found that the AO's actions were justified in response to the petitioner's request for specific material. Additionally, the petitioner's failure to provide a satisfactory explanation for the transaction with M/s Subhshree Financial Management Pvt. Ltd. led to the court finding no error in the AO's decision. The court clarified that it did not express any opinion on the merits of the controversy, leaving all rights and contentions of the petitioner open for assessment proceedings.

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Issues Involved:
1. Validity of the notice issued under Section 148A(b) of the Income Tax Act, 1961.
2. Compliance with the mandatory procedure under Section 148A of the Act.
3. Timeliness and legality of the notice dated 23rd June, 2022.
4. Legitimacy of the transaction between the petitioner and M/s Subhshree Financial Management Pvt. Ltd.
5. Interpretation of the term 'asset' under Section 149(1)(b) of the Act.
6. Whether the CBDT Instruction No. 01/2022 is ultra vires.

Detailed Analysis:

1. Validity of the Notice Issued Under Section 148A(b):
The petitioner received a notice dated 19th April 2021 under Section 148 of the Income Tax Act, 1961, initiating reassessment proceedings for AY 2013-14. The petitioner challenged this notice, and it was quashed by the court, following the judgment in Mon Mohan Kohli vs. Assistant Commissioner of Income Tax & Anr. However, based on the Supreme Court's judgment in Union of India & Ors. vs. Ashish Agarwal, the petitioner was served another notice on 17th May 2022, which provided the reasons for reopening the assessment.

2. Compliance with the Mandatory Procedure Under Section 148A:
The petitioner argued that the notice dated 19th April 2021 was issued without following the mandatory procedure under Section 148A. The court had earlier quashed this notice, and a new notice was issued on 17th May 2022, providing the necessary information and material relied upon by the AO. The petitioner responded with a detailed reply, denying the financial transactions alleged.

3. Timeliness and Legality of the Notice Dated 23rd June 2022:
The petitioner contended that the AO could not have issued the notice dated 23rd June 2022, as it was beyond the permissible period and introduced new facts. The court, however, found that the AO issued the notice in response to the petitioner's request for better particulars. The court held that the AO was not precluded from providing additional information on 23rd June 2022, as it was necessary for the petitioner to provide a meaningful response.

4. Legitimacy of the Transaction Between the Petitioner and M/s Subhshree Financial Management Pvt. Ltd.:
The AO's notice dated 23rd June 2022 sought an explanation for a transaction of Rs. 50,00,000/- with M/s Subhshree Financial Management Pvt. Ltd. The petitioner replied, denying the transaction and asserting that no specific date or material was provided to support the allegation. The court noted that the petitioner did not offer any explanation for the transaction in her reply dated 27th June 2022, and thus, found no error in the AO's impugned order.

5. Interpretation of the Term 'Asset' Under Section 149(1)(b):
The petitioner argued that the credit of Rs. 50,00,000/- was not an 'asset' within the meaning of Section 149(1)(b). The respondent countered that the term 'asset' includes deposits in the bank account, and thus, the transaction was covered under this provision. The court did not find the petitioner's argument persuasive and held that the transaction was subject to assessment.

6. Whether the CBDT Instruction No. 01/2022 is Ultra Vires:
The petitioner did not address arguments on the challenge to the CBDT Instruction No. 01/2022, and the court did not examine this issue.

Conclusion:
The court dismissed the writ petition and application, finding no infirmity in the AO's impugned order. The court emphasized that the AO was justified in issuing the notice dated 23rd June 2022, as it was in response to the petitioner's request for specific material. The court also noted that the petitioner failed to provide a satisfactory explanation for the transaction with M/s Subhshree Financial Management Pvt. Ltd. The court clarified that it did not express any opinion on the merits of the controversy, leaving all rights and contentions of the petitioner open for assessment proceedings.

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