Court dismisses petitions challenging income escapement assessment notices under section 148A(b) for lack of due process.

The Court dismissed two writ petitions challenging notices issued under sections 148A(b) and subsequent orders for income escapement assessment. The petitioners alleged lack of due process in issuing the notices. The Court found the information provided was adequate for the petitioners to respond effectively, rejecting claims of insufficient opportunity to be heard. Both petitions were dismissed, allowing parties to seek remedies under section 148 of the Income Tax Act.

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Issues Involved:
The judgment involves challenges to notices issued under the Income Tax Act, 1961, specifically under sections 148A(b) and 148A(d), regarding the escapement of income assessment for the assessment year 2019-20. The main issues revolve around the failure of the Revenue to follow due process of law before issuing the notices and orders.

Writ Petition No. 8854 of 2023:
The petitioner, a partnership firm, received a notice under section 148A(b) of the Income Tax Act on 03.03.2023, based on information related to GST Invoice Fraudsters. The notice detailed reasons for the Assessing Officer to believe that certain income had escaped assessment. The petitioner was found to have engaged in transactions with a non-existent entity, resulting in the artificial inflation of purchase expenses and reduction of taxable income. Despite seeking time for collection of documents and submitting replies, the subsequent order under section 148A(d) was passed on 17.03.2023, followed by a notice under section 148 proposing reassessment of the escaped income.

Writ Petition No. 8990 of 2023:
This petition also challenges a notice issued under section 148A(b) on 03.03.2023, along with subsequent orders and notices regarding the escapement of income assessment for the assessment year 2019-20. The petitioner raised concerns about the Revenue's failure to adhere to due process of law before issuing the notices and orders.

Adjudication:
The Court heard arguments from both parties and considered the grounds raised by the petitioner. The petitioner primarily challenged the lack of a reasonable opportunity to be heard due to non-supply of relevant material and the absence of a direct link between the information received by the Assessing Officer and the belief that income had escaped assessment.

Court's Decision:
Regarding the first ground, the Court referred to a previous decision highlighting the objectives behind Section 148A, emphasizing the need to prevent casual issuance of notices by the Revenue and to protect the assessee from unnecessary harassment. The Court found that the information provided to the petitioner was sufficient to prepare an effective response, thus dismissing the challenge on this ground.

Conclusion:
The Court declined to interfere and dismissed both writ petitions, allowing the petitioners and the Revenue to pursue remedies available under section 148 of the Income Tax Act in accordance with the law.

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