Tax Assessment Orders Overturned: Lack of Cash Transaction Details Leads to Reassessment for 2014-16 Tax Years.

The HC set aside the Assessment Orders for the Assessment Years 2014-2015 and 2015-2016, issued under Section 148 of the Income Tax Act, 1961, due to the absence of specific cash transaction details in the employee's account. The case was remitted to the Department for fresh orders, requiring detailed information on cash transactions. The Court mandated the Department to complete the proceedings within six months and disposed of the Writ Petitions without costs, closing the connected Writ Miscellaneous petitions.

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Issues:
Challenge to notice under Section 148 of the Income Tax Act, 1961 for Assessment Years 2014-2015 and 2015-2016 based on re-opening of assessments. Jurisdiction of notice issued post 01.04.2021. Validity of Assessment Orders dated 30.03.2022. Requirement of furnishing details of cash transactions in employee's account.

Detailed Analysis:
The petitioner challenged the notice issued under Section 148 of the Income Tax Act, 1961 for the Assessment Years 2014-2015 and 2015-2016, seeking to re-open the assessments completed earlier under Section 143(3) of the Act. The reasons for re-opening the assessments pertained to cash credits in the bank account of an employee, triggering Section 40A(3) of the IT Act. The petitioner contended that the notice issued post 01.04.2021 lacked jurisdiction, citing a Supreme Court decision. The Department defended its actions, stating that furnishing details of the account during re-opening was unnecessary as long as information was available for the Department.

The Court considered arguments from both sides and noted that while re-opening based on information from the Investigating Wing was valid, the Assessment Order should have specified details of the cash transactions in the employee's account. Since this information was missing, the Court set aside the impugned order and remitted the case back to the Department for a fresh order with specific particulars of the cash transactions. The Court directed the Department to provide the dates of transfers mentioned in the re-opening reasons and any other relevant information linking the cash deposits to the petitioner. The Court mandated expeditious completion of denovo proceedings within six months from the date of the order for the Assessment Years 2014-2015 and 2015-2016.

In conclusion, the Court disposed of the Writ Petitions with the above observations, without imposing any costs. The connected Writ Miscellaneous petitions were closed accordingly.

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