2026 (2) TMI 981 - AT - Income Tax

Supply of reopening materials required; failure renders the notice invalid and assessment unsustainable, allowing recommencement only with materials.

Reopening under the new statutory regime requires supply of the materials forming the basis of reopening along with the Section 148A(b) notice so the ... Reopening of assessment u/s 148 of the new regime - requirement to supply the materials forming the basis of reopening - AR placed on record a screenshot of the ITBA portal showing that only the notice was issued without any annexures/information being attached thereto - HELD THAT:- In the present case, admittedly, no material was supplied to the assessee, notwithstanding the fact that, there was material available with the AO. It is clear from the assessment order that, only the gist of information was shared by the AO by way of reasons recorded along with the notice u/s 148A(b) of the Act. It is an admitted legal position that the materials forming the basis of reopening have to be supplied in terms of the new provisions of the Act, failing which, the assessee is precluded from filing an effective response. This position stands fortified by the directions of Union of India vs. Ashish Agarwal [2022 (5) TMI 240 - SUPREME COURT] This Tribunal is, therefore, of the opinion that the notice issued u/s 148 of the Act under the new regime is bad in law, as the order passed u/s 148A(d) was passed without providing proper opportunity to the assessee to represent its case, in accordance with law. Decided in favour of assessee. Issues: Whether the notice issued under Section 148A(b)/Section 148 of the Income-tax Act, 1961 (new regime) was validly issued in compliance with the statutory requirement to supply the materials forming the basis of reopening, and whether the resulting assessment is legally sustainable.Analysis: Reopening under the new provisions introduced by the Finance Act, 2021 requires not only reasons recorded but also supply of the materials forming the basis of the reopening so that the assessee can file an effective reply. In the present case, only the reasons recorded were furnished with the notice issued under Section 148A(b), while the underlying material available with the assessing officer was not supplied. The absence of materials precluded effective representation by the assessee and thereby breached the procedural requirements of Section 148A and the principles of natural justice. Relevant authority establishes that assessment proceedings commenced without providing the requisite material are unsustainable. The Tribunal permitted the Revenue to recommence proceedings from the stage of notice under Section 148A(b) subject to supplying the relevant material and limitation constraints.Conclusion: The notice under Section 148A(b)/Section 148 was invalid for non-compliance with the requirement to supply materials forming the basis of reopening; the assessment order is quashed and Ground No. 1 is allowed in favour of the assessee.