Court sets aside Section 148A(d) order, deems consequential notice invalid for assessment errors. Officer directed to act on original allegation.

The court set aside the order passed under Section 148A(d) of the Income Tax Act, 1961 and declared the consequential notice invalid due to errors in assessment. The Assessing Officer was directed to proceed based on the original allegation in the notice issued under Section 148A(b) of the Act. The writ petition was disposed of with compliance instructions.

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Issues involved:
The judgment concerns a writ petition challenging an order passed under Section 148A(d) of the Income Tax Act, 1961 for Assessment Year (AY) 2019-20. The petitioner also challenges a notice issued under Section 148 of the Act and another notice issued under Section 148A(b) of the Act.

Challenge to Order and Notices:
The petitioner challenged the order dated 28.04.2023 passed under Section 148A(d) of the Income Tax Act, 1961, as well as notices issued under Section 148 and Section 148A(b) of the Act. The petitioner argued that the Assessing Officer (AO) deviated from the original allegation made in the notice dated 23.03.2023 issued under Section 148A(b) of the Act.

Allegations and Conclusion:
The notice dated 23.03.2023 alleged that income chargeable to tax had escaped assessment due to a transaction involving the purchase of shares from Lendingkart Technologies Pvt. Ltd. The order dated 28.04.2023 accepted the petitioner's explanation on the source of investment but raised issues regarding missing documents related to the share transaction. The AO concluded that without a valuation report, it was unclear if shares were purchased at fair market value as per Section 50CA of the Act.

Errors in Assessment:
The court found errors in the assessment process as the AO did not raise the valuation report issue in the original notice. Additionally, since this was an investment case and not a share transfer, the provisions of Section 50CA may not have been applicable. Consequently, the court set aside the order dated 28.04.2023 and declared the consequential notice of the same date invalid.

Next Steps and Disposal:
The AO was granted liberty to proceed in accordance with the law and was instructed to base any future actions on the original allegation in the notice issued under Section 148A(b) of the Act. The writ petition was disposed of with parties instructed to comply with the digitally signed copy of the order.

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