TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 1096
X X X X Extracts X X X X
X X X X Extracts X X X X
....,94,750/- and notice u/s 148 was issued on 16.03.2020. In response to the said notice, assessee filed return of income on 27.06.2020, declaring same income as was declared u/s 139(1) of the Act. Thereafter, various notices were issued from time to time, and after considering the replies filed by assessee, re-assessment order was passed. The AO by alleging that assessee received cash loan of INR 50 Lakhs and paid interest as confirmed in the statement of Shri J.P. Sharma recorded u/s 132(4) of the Act and made the addition of INR 54,94,750/-. 3. Against the said order, assessee filed an appeal before Ld. CIT(A) who vide order dated 24.10.2024, has confirmed the order of AO and dismissed the appeal of the assessee. 4. Aggrieved by the order of Ld. CIT(A), assessee is in appeal before the Tribunal by taking following grounds of appeal:- A) "That Ld CIT-A vide impugned order passed us 250 dated 24.10.2024 erred in not quashing the impugned assessment order passed u/s 147/143(3) of "1961" Act dated 23.02.2021, which is nullity and is void ab initio and unlawful and is passed without authority of law. B) That Ld CIT-A vide impugned order passed us 250 dated 24.10.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....llegal and invalid approval thus they are taken together for consideration. 8. Before us, Ld.AR submits that despite of repeated requests, reasons recorded before re-opening of assessment were never provided to the assessee. He further submits that copy of the Approval memo u/s 151 of the Act by the Competent Authority was not provided thus, it is not clear whether valid sanction was taken or not by the AO. It is thus submitted that the proceedings initiated without supply the reasons recorded and the material relied upon, deserves to be bad in law and consequent assessment order passed, deserves to be quashed. 9. Reliance is placed on the judgement of Hon'ble Patna High Court in the case of Kishore Kumar Singh vs Deputy/Assistant CIT, Circle-4, Patna in Civil Writ Jurisdiction Case No.587 of 2022 dated 22.04.2025 wherein Hon'ble Patna High Court has held that "once the assessee has filed the return of income, the assessee be provided an opportunity to object the re-opening of assessment by supplying the materials. In absence of the non-supply of the reasons alongwith material, it could not be stated that the assessee was provided a reasonable opportunity of being heard." ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....must be supported by reasons otherwise aggrieved person has no opportunity of filing his detailed explanation to such notice. Reading of the aforementioned notice, it is very bald and vague, resultantly, petitioners are not in a position to submit their explanation effectively. Core issue involved in the present lis is whether official respondent while issuing notice under Section 148 of the Income Tax Act, 1961 require to furnish reasons or not? The learned counsel for the petitioners submitted that reasons are mandatory requirement to meet Article 14 of the Constitution of India otherwise petitioners are not in a position to submit their explanation in effective manner. It is also submitted that respondents while issuing notice under Section 148 are exercising quasi judicial functions, therefore, any quasi judicial action taken by the official respondent, it must be supported by reasons otherwise aggrieved person has no opportunity of submission of effective reply to the notice. Learned counsel for the respondents relied on the cited decisions supra to contend that no reasons are required to be furnished along with the notice under Section 148, the same cannot b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pen to be urged before concerned authority/forum". 14. Further, Hon'ble Delhi High Court in the case of Tia Enterprises P. Ltd. (supra) held that in absence of approval u/s 151, consequent re-assessment proceedings are invalid. Relevant observation of the Hon'ble High Court has held as under:- 13. "To our minds, the approval granted by the statutory authorities, as required under the provisions of the Act, has to be furnished to an assessee along with the reasons to believe. The statutory scheme encapsulated in the Act provides that reassessment proceedings cannot be triggered till the Assessing Officer has reasons to believe that income, which is otherwise chargeable to tax, has escaped assessment and the reasons recorded by him are placed before the specified authority for grant of approval to commence the process of reassessment." 15. The Co-ordinate Bench of Delhi Tribunal in the case of ITO vs B.C. Enterprises (supra) had made the following observations:- 10. We have heard the rival submissions and perused the material available on record. In the instant case, the assessee since inception of the proceedings asked the AO for supply of the material relied....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ied, with the prior approval of the Principal Commissioner or Commissioner that any money, bullion, jewellery or other valuable article or thing, seized in a search under section 132 or requisitioned under section 132A, in the case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or (c) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any books of account or documents, seized in a search under section 132 or requisitioned under section 132A, in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, 2 [relate to, the assessee; or (d) the Assessing Officer has received any information under the scheme notified under section 135A pertaining to income chargeable to tax escaping assessment for any assessment year in the case of the assessee.] Explanation.-For the purposes of this section, specified authority means the specified authority referred to in section 151.]" 12. From the perusal of the provisions of section 148A, it is clearly provided in sub-section (a) that before issue of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....148A(b) of the Act. It appears that the AO simply proceeded to reopen the case of the assessee based on the information available on the insight portal which is uploaded under Risk Management Strategy formulated by CBDT and no independent application of mind by AO before using such information against the assessee nor any enquiry was made as provided in section 148A(a) of the Act. This action of AO is highly arbitrary as he failed to appreciate the intent of the legislation behind introduction of provisions of section148A before issue of notice u/s 148 of the Act. The AO not only proceeded to issue notice u/s 148A(a) without making verification of the vague and insufficient information available with him to satisfy himself that income chargeable to tax has escaped assessment but at the same time also failed to provide the material relied upon to the assessee along with notice u/s 148A(b) of the Act. The Hon'ble Supreme Court in the case of Ashish Agarwal (supra) has held that AO should supply the relied upon material to the assessee so as to enable him to respond the show cause notice issued by AO. We also observed that ld. CIT(A) while dismissing this plea of the assessee in para ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ine those dealers and what extraction the appellant wanted from them." [Emphasis supplied]" 15. The Co-ordinate Bench of Tribunal in the case of Best City Infrastructure Ltd. vide order dated 31.05.2016 has held that not providing opportunity of cross examination makes the addition invalid. This order is upheld by Hon'ble Delhi High Court as reported in 397 ITR 82. Similar view is expressed by Hon'ble High Courts in following cases: -PCIT vs. Pavitra Realcom Pvt. Ltd. in ITA No.579/2018 (Delhi) -PCIT vs. Esspal International Pvt. Ltd. in ITA No.25/2024 (Rajsthan) -Dr. M. Malliya vs. ACIT in TCA No.284/11 (Madras). Therefore, not providing the opportunity to cross examine the witness whose statements are relied upon by the Revenue is gross violation of principal of natural justice. Moreover, the AO has failed to consider the reply filed by the assessee in response to notice issued u/s 148A(b) of the Act. Hon'ble Rajsthan High Court in the case of R.K. Buildcreations (Pvt.) Ltd. vs. ITO reported in [2024] 462 ITR 478 (Raj) has held as under: "It is mandatory for the AO to pass speaking order, taking into consideration not only the....