Post-survey findings can indicate escaped income, justifying issuance of notices under section 148A(b); applicability of amended s.149 questioned.

The HC held that information emerging from a post-survey disclosure can constitute information suggesting escaped income, justifying issuance of notices under section 148A(b); two such notices dated 28.03.2023 and 29.03.2023 were found on record. The court noted the entire survey report was not furnished to the petitioner and that the question whether unamended pre-1.4.2022 provisions or amended Sections (including s.149) apply requires further examination. The matter was listed for further hearing on 22.11.2023.

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Issues involved:
The writ petition concerns Assessment Year 2016-17 challenging notices issued under Section 148A(b) of the Income Tax Act, 1961, order passed under Section 148A(d) of the Act, and consequential notice issued under Section 148 of the Act.

Assailed Notices and Orders:
The petitioner challenged the notices dated 28.03.2023 and 29.03.2023 issued under Section 148A(b) of the Act, the order dated 19.04.2023 passed under Section 148A(d) of the Act, and the consequential notice dated 19.04.2023 issued under Section 148 of the Act. The reassessment proceeding was triggered following a survey conducted against the petitioner.

Contentions and Submissions:
The petitioner contended that the entire survey report, forming the basis for the reassessment proceeding, was not furnished, leading to a breach of natural justice. The petitioner also argued that the amended provision of Section 149 of the Act, post the Finance Act 2022, was erroneously applied to transactions related to AY 2016-17, which were incurred prior to the amendment.

Legal Arguments:
The respondents argued that the survey information post-amendment should be considered for reassessment under clause(ii) of Explanation 2 of Section 148 of the Act. They maintained that the notices were issued under Section 148A(b) of the Act due to the absence of "survey" in the relevant clause. The respondents claimed that the information emerged after the survey conducted post the Finance Act 2022.

Court's Observation and Direction:
The Court noted discrepancies in the application of the amended Section 149 of the Act to the petitioner and directed further examination of the matter. The Court issued notice to the respondents, accepting notice on their behalf. Counter-affidavit and rejoinder were ordered to be filed within specified timelines, with the case listed for further hearing on a specific date. A stay was granted on the continuation of reassessment proceedings until further court directions.

Conclusion:
The judgment highlighted the disputed notices and orders under the Income Tax Act, 1961, focusing on the challenges raised by the petitioner regarding the survey report, application of amended provisions, and the timeline for reassessment. The Court's direction for further examination and stay on reassessment proceedings reflects the need for a detailed review of the legal aspects involved in the case.

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