2022 (5) TMI 1016

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....on 148 of the Act. 2. Learned counsel for the Petitioner contends that the impugned Order dated 04th April, 2022 under Section 148A(d) has been passed without considering the replies dated 24th March and 31st March, 2022 filed by the Petitioner to the show cause notice. He states that the petitioner filed a preliminary response to the above said show cause notice whereby the petitioner objected to the legal validity of the notice under Section 148A(b) on the ground that there was no information that suggested that income had escaped assessment. The petitioner further requested respondent No.1 to provide the information/documents, relied upon for assuming jurisdiction, which suggest that income had escaped assessment and further requested a week's time from date of sharing such information so that the petitioner could file a detailed para wise response. Although the information requested for was not shared with the petitioner, yet the petitioner filed a detailed para wise response dated 31st March, 2022 in respect of each of the transaction stated by the respondent in the show cause notice dated 17th March, 2022. The petitioner further submitted voluminous documentary evidences a....

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....ansactions and how income has escaped assessment. In any case, these transactions are carried out in the ordinary course of business and duly accounted for in the profit and loss account and return filed by the Petitioner. Para 5 At para 5, it has been stated that assessee has made payment of salary for Rs.1,05,17,362 to its employees. A table under para 5 captures details of such payments. These details have been culled out from TDS returns. There is no allegation/comment as to what is wrong with such transactions and how income has escaped assessment. In any case, these transactions are carried out in the ordinary course of business and duly accounted for in the profit and loss account and return filed by the Petitioner. Para 6 At para 6, it has been stated that assessee has made fictitious purchases of Rs.19,38,595/- with M/s Vagabound Tradex Private AY 2018-19. Here, an allegation has been made that Petitioner has made Fictitious purchases with M/s Vagabound Tradex Private No information, etc. has been given to indicate the basis for such allegation. The observations are without any basis whatsoever. It is vehemently denied that no transaction was carrie....

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....itioner within the stipulated time period, as provided in the notice under Section 148A(b) of the Act. He states that the detailed reply dated 31st March, 2022 filed by the Petitioner was not considered by the Assessing Officer as the same had not been filed within the stipulated time of seven days. COURT'S REASONING NEW RE-ASSESSMENT SCHEME WAS INTRODUCED BY THE FINANCE ACT, 2021 WITH THE INTENT OF REDUCING LITIGATION AND TO PROMOTE EASE OF DOING BUSINESS. 7. This Court is of the view that the new re-assessment scheme (vide amended Sections 147 to 151 of the Act) was introduced by the Finance Act, 2021 with the intent of reducing litigation and to promote ease of doing business. In fact, the legislature brought in safeguards in the amended re-assessment scheme in accordance with the judgment of the Supreme Court in GKN Driveshafts (India) Ltd. v. ITO, (2003) 259 ITR 19 (SC) before any exercise of jurisdiction to initiate re-assessment proceedings under Section 148 of the Act. 8. This Court is further of the view that under the amended provisions, the term "information" in Explanation 1 to Section 148 cannot be lightly resorted to so as to re-open assessment. This infor....

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....E IMPUGNED SHOW CAUSE NOTICE HAD NOT BEEN SHARED WITH THE PETITIONER. 11. This Court further finds that the information/material stated in the impugned show cause notice dated 17th March, 2022 issued under Section 148A(b) of the Act have not been shared with the Petitioner, despite specific request made by the Petitioner vide letter dated 24th March, 2022, thereby denying the Petitioner an effective opportunity to file a response/reply. The non-sharing of the information is violative of the rationale behind the judgment of this Court in Sabh Infrastructure Ltd. vs. Asst. CIT, 398 ITR 198 (Del). PETITIONER WAS NOT GIVEN REASONABLE TIME TO FILE A REPLY. 12. This Court is also of the view that the petitioner-assessee has a right to get adequate time in accordance with the Act to submit its reply. In the present case, the impugned order under Section 148A(d) of the Act has been passed in great haste and in gross violation of principle of natural justice as the Petitioner was not given reasonable time to file a reply. In a matter where on the basis of Tax Deducted at Source/Goods and Services Tax/Service Tax/ Securities Transaction Tax returns updated by the stock exchange and ....