Reopening of assessment upheld where prima facie material and approval by prescribed authority followed an opportunity to respond.

Challenge to notices for reopening assessment turned on whether statutory pre-conditions under the reopening scheme were complied with; the court found the inquiry under the procedural provision was conducted, documents were furnished, the taxpayer had opportunity to respond, and approval by the prescribed higher authority was obtained. The court treated relied-upon statements, documentary records and survey findings as prima facie material justifying issuance of the notice and distinguished authority relied on by the taxpayer on factual grounds, and consequently dismissed the petition and upheld the order and notice.

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Issues: Whether the order passed under Section 148A(d) of the Income-tax Act, 1961 and the notice issued under Section 148 of the Income-tax Act, 1961 for reopening assessment of the petitioner for assessment year 2019-20 are vitiated and liable to be quashed.

Analysis: The statutory scheme under Sections 148A and 149 of the Income-tax Act, 1961 requires an inquiry and opportunity of hearing before issuance of a notice under Section 148, and prescribes time limits and specified authorities for approval. The material relied upon for initiation included survey findings, documentary records, ledger entries, confirmation, and recorded statements alleging bogus purchases and accommodation entries. The authority's order under Section 148A(d) records consideration of the petitioner's reply and documentary material. The approval under Section 151 was obtained from the Principal Commissioner as applicable to the assessment year involved. The petitioner's objections - non-supply of documents, denial of cross-examination, incorrect specified authority, and legal infirmity in treating purchases as escaped income - were evaluated against the record: documents were supplied, the petitioner filed a reply and had opportunity to raise defenses, the specified authority accorded approval as per the applicable clause, and the alleged factual basis for reopening (statements, documents and prior similar findings) constituted prima facie material permitting issuance of notice. Case-law relied on by the petitioner was distinguished on facts where cross-examination denial or lack of documentary basis rendered orders untenable; whereas authorities cited for respondents support non-interference at the writ stage where proceedings are ongoing and no procedural defect is shown.

Conclusion: The order under Section 148A(d) of the Income-tax Act, 1961 and the notice under Section 148 of the Income-tax Act, 1961 are valid; the petition challenging them is dismissed.

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