TaxTMI 
TaxTMI 
2023 (1) TMI 46
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....t') on 19.03.022, asking the assessee/petitioner to show cause as to why case should not be reopened under Section 147 read with Section 148 of the Act. 2. A perusal of the show cause notice would go to reveal that the case was sought to be reopened on the following grounds:- "a). That as per the learned Assessing Officer the firm ha sold mutual funds amounting to (which E Rs.8,13,63,000/- had not been declared in the income tax return a 13 income for the impugned assessment year. b) That the learned Assessing officer was of the view the assessee firm had interest in assets amounting Rs.18,07,73,000/- which had also not been offered for taxation. c) Last but not the least, the learned Assessing Officer being the respondent No.2 was of the view that assessee's firm had made foreign remittance which had not been declared in the return of income. The value of the foreign remittance amounting to Rs.78,29,747/- and in totality according to the learned Assessing Officer a sum of Rs.26,99,62,000/- had escaped assessment." 3. The petitioner filed reply to the show cause notice dated 26.03.2022, wherein it had categorically been mentioned that neither th....
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....t; (b) provide an opportunity of being heard to the assessee, 1[***] by serving upon him a notice to show cause within such time, as may be specified in the notice, being not less than seven days and but not exceeding thirty days from the date on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice under section 148 should not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a); (c) consider the reply of assessee furnished, if any, in response to the show-cause notice referred to in clause (b); (d) decide, on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under section 148, by passing an order, with the prior approval of specified authority, within one month from the end of the month in which the reply referred to in clause (c) is received by him, or where no such reply is furnished, within one month from the end of the month in which time or....
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....verting to the facts, it would be noticed that notice under Clause (b) of Section 148A of the Act was served upon the petitioner, which reads as under:- Whereas have information which suggests that income chargeable to tax for the Assessment Year 2018-19 has escaped assessment within the meaning of section 147 of the Income-tax Act, 1961. The details of the information and enquiry, if conducted, are enclosed with this notice in Annexure-A. 2. You are required to show cause as to why, in view of the details contained in Annexure A, a notice section 148 of the Income Tax Act, 1961 should not be issued. 3. You may, to the extent technologically feasible, submit your response with supporting documents (if any) on the above mentioned issues electronically in 'e-proceeding facility through your account in e-filing portal at your convenience on or before 26/03/2022. 4. This notice is being issued after obtaining the prior approval of the PCIT, Chandigarh-1 accorded on date 19/03/2022 vide Reference No. 100000028876635. Annexure As per information received under RMS (Risk Management System for the F.Y. 2017-18 relevant to A.Y. 2018-....
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....information provides. 2. Further, it is mentioned in the notice that "interest held in assets of a firm or association of persons as a partner or member by the assessee has been shown at Rs. 1897.73 lac In respect to the same we submit that the assessee firm does not have any interest in assets of a firm or association as a partner or member amouting to Rs. 1807.73 Lacs. However, your goodself stated in the notice that the assessee has interest held in assets of a firm or association of persons as a partner or member by the assessee has been shown at Rs. 1807/73 lacs. So. keeping in view of providing an opportunity of being heard and principal of natural justice, it is requested to your goodsell to kindly provide detalls of such interest held by the assessee firm as claimed by your goodself of Rs.1807.73 lacs Uke any document to provide the name of the firm or association in which the assessee is partner or member, date of acquisition of such interest, bank account which shows the transaction for purchase of such interest etc. so that assessee's response can be filed with your goodself with respect to Information provided. 3. Also it is mentioned in the notice....
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....i 8,13,63,000/- Interest in held in assets Yogender Kumar Jain, Arun Kumar Jain 18,07,72,000/- Foreign remittances Oriental Bank Commerce 78,29,747/- 14. Had the respondents earlier referred to the names, obviously, the petitioner would have been in a better position to file its reply to the show cause. But that apart, it needs to be noticed that only reason given by the respondents for issuing the show cause notice by passing an order under Clause (d) of Section 148A is contained in para 3 thereof, which reads as under:- "3. The submission filed by the assessee are neither relevant as per the show cause notice nor tenable due to the lack of any supporting evidence. Since the assessee has not fully or truly disclosed the sources of income amounting to Rs. 26,99,62,000/- during the previous year 2017-18 relevant to AY. 2018-19 therefore, I have reasons to believe that the income to the extent of Rs. 26,99,62,000/- has escaped assessment for the Asstt.year 2018-19. Therefore, in this case I have reasons to believe that the income to the extent of Rs 26,99,62,000/- has escaped assessment for the A.Y 2018-19." 15. The Assessing Officer has virtually ....
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....e present writ petition along with pending application stands disposed of. The rights and contentions of all the parties are left open." 17. In Divya Capital One (P.) Ltd vs. Assistant Commissioner of Income Tax, the Court held as under:- "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 (2002) 125 Taxman 963120031 259 ITR 19 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 information cannot be a ground to give unbridled pow....
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....assessee for the relevant assessment year has not been made in accordance with the provisions of this Act; or (iii) any information received under an agreement referred to in section 90 or section 90A of the Act; or (iv) any information made available to the Assessing Officer under the scheme notified under section 135A; or (v) any information which requires action in consequence of the order of a Tribunal or a Court ii. Further, explanation 2 to section 148 provides the incidence where assessing officer shall be deemed to have information. Explanation 2- where AO shall be deemed to have information suggesting escapement of income- (i) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A, on or after the 1st day of April, 2021, in the case of the assessee; or (ii) a survey is conducted under section 133A, other than under subsection (2A) of that section, on or after the 1st day of April, 2021, in the case of the assessee; or iii) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commiss....
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.... In other words, in above mentioned category of cases, notice under section 148 can be issued with the prior approval of specified authority without following the procedure mentioned in the section 148A. iv. The "specified authority" for the seeking approval for conducting enquiry u/s 148A(a), passing order u/s 148A(d) and issuance of notice u/s 148 shall be: Specified Authority for sanction for issue of notice u/s 148, 148A (a) and 148A (d) Time limit (Calculated from the end of the relevant AY) PCIT or PDIT or CIT or DIT (ref. Seetion 151(i)) Upto 3 years PCCIT or PDGIT or where there is no PCCIT or PDGIT then approval from CCIT or DGIT (ref Section 151(ii)) More than 3 years but upto 10 years v. Explanation 2 to section 148 of the Act provides that if a survey u/s 133A of the Act (other than under section 133A (2A)) was conducted in the case of the assessee on or after 1st April, 2021, the Assessing officer shall be deemed to have information which suggests that income chargeable to tax has escaped assessment. However, it is to clarify that the due procedure as prescribed u/s 148A needs to be followed in such cases also before issuing a notice....
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....r clause (d) of section 148A has been passed, no further approval is required for issuance of notice u/s 148 by the AO, with effect from 1.4.2022.* (*except for cases in which procedure under Section 148A is being applied for implementation of the Hon'ble Supreme Court's judgment in the case of UOI Vs. Ashish Agrawal ( 2022 SCC online SC 543) dated 4.5.2022 for which specific instruction dated 11.5.2022 has been issued.) xiv. In the cases emanating out of Audit objection, AO has to ensure that extant instructions/ guidelines/ SOPs have been duly adhered with. xv. The confidential information such as from FIU, foreign jurisdictions, LEAs etc would be governed by respective guidelines governing sharing of such xvi. Information relevant to the case of the assessees' income escaping assessment must be provided and Information not relevant to the case of the assessee must be redacted. 2.2 Notices along with annexures shall be sent to assessee as follows- Category of case Order/sanction document to be sent along with notice u/s 148 Cases covered under para 2.1 (iii) above ● Notice u/s. 148 (Annexure B) and ● prior appro....