TaxTMI 
TaxTMI 
2025 (4) TMI 2174
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....cuments for the grounds of appeal. 3. The appeal order was passed in haste on 02.08.2024 after issuing only a deficiency letter dated 04.07.2024 about delay in filing the appeal. No show cause notice was issued about the proposed rejection of grounds of appeal filed by the appellant regarding deposits in the joint bank account and determination of the sale consideration of Rs. 90 Lakhs itself as capital gains without granting deduction for indexed cost of acquisition. Also, the various principles of passing ex-parte order laid down by Tribunals and Courts have not been followed. 4. The learned CIT(A) erred in overlooking the fact that the learned AO's order u/s 148A(d) was blank and was devoid of any contents, thus violating the basic ingredients of income escaping assessment u/s 147/148 and thus rendering the proceedings void ab initio and illegal. 5. The learned CIT(A) erred in ignoring the fact that the Assessing officer, by issuing notice u/s 148A(b) dated 23.03.2022 granted time only to 29.03.2022, which is less than mandatory time period of 7 days as per the section and subsequently, passed the order u/s 148A(d) dated 31.03.2022 within a short p....
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....f the Act which suggests that the assessee during the F.Y. 2014-15 had sold an immovable property and deposited cash being excess of Rs. 50,00,000/- which was represented in the form of an asset i.e. immovable property being land or building or both as per the explanation to section 149(1) of the Act. On examination of the information available on records, it has been seen that the assessee had sold an immovable property for a sale consideration of Rs. 90,00,000/- to Shri Dhandapani Narayan. Further the assessee has deposited cash of Rs. 39,23,000/- in Canara bank and did not disclose the nature & source thereof. The assessee had also earned salary income of Rs. 70,581/- from the Senior Post Master. The AO found that the assessee failed to file the return of income for the A.Y 2015-16 and failed to disclose the salary Income & capital gain. Based on the above information the AO noted that there is an income chargeable to tax that has escaped assessment for the A.Y 2015-16 & accordingly issued show cause notice u/s 148A(b) of the Act on 23/03/2022 by directing to submit the response with supporting documents on or before 29/03/2022. The AO passed a blank order u/s 148A(d) of the Act....
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.... vehemently argued on the legal grounds by submitting that the AO by issuing notice u/s 148A(b) of the Act dated 23/03/2022 by granting time only up to 29/03/2022, which is less than the mandatory minimum time period of 7 days vitiated the entire proceedings. Further AR of the assessee submitted that the AO's order u/s 148A(d) of the Act was completely blank and devoid of any contents, & thus violating the basic ingredients of income escaping assessment & thus rendering the entire proceedings void-ab-initio and illegal. Lastly the AR of the assessee submitted that the CIT(A) gross erred in overlooking the fact that the AO had not uploaded the mandatory approval obtained u/s 151 of the Act in the income tax portal. 8. The ld. DR on the other hand supported the order of the authorities below & submitted that the assessee is a non filer and had not submitted any documents/information/evidences before any of the Authorities below. Further the ld. DR submitted that the AO had information within the meaning of the provision of explanation 1(i) of section 147 of the Act which suggests that the assessee during the F.Y. 2014-15 had sold an immovable property amounting to Rs. 90,00,00....
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..... 9.3 Now the first legal ground as raised by the assessee is that the AO by issuing notice u/s 148A(b) of the Act dated 23/03/2022 by granting time only up to 29/03/2022, which is less than the mandatory minimum time period of 7 days vitiated the entire proceedings as this is clear gross violation of principles of natural justice. Further the second legal ground as raised by the assessee is that the AO's order u/s 148A(d) of the Act was completely blank and devoid of any contents, & thus violating the basic ingredients of income escaping assessment & thus rendering the entire proceedings void-ab-initio and illegal. We will take up both the legal grounds ad seriatim. 9.4 Before us, the ld.AR of the Assessee submitted that the show cause notice u/s 148A(b) of the Act dated 23/03/2022 granting just 6 (six) days to submit response vitiated the entire reassessment proceedings. The notice issued u/s 148A(b) of the act are reproduced below for the sake of convenience & reference - 9.5 On going through the above notice issued u/s 148A(b) of the Act, we find that the notice dated 23/03/2022 was issued for the assessment year 2015-16 requiring the assessee to show cause as to w....
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....ed under section 132 or books of account, other documents or any assets are requisitioned under section 132A in the case of the assessee on or after the 1st day of April, 2021; or (b) the Assessing Officer is satisfied, 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 1 st 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, ^24[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 purpos....
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....not found to be in conformity with the mandate of law. Further we are of the opinion that there is a clear violation of the principles of natural justice by providing inadequate opportunity of being heard to the assessee. We are also of the considered opinion that minimum statutory requirement of 7 days to submit the response to show cause is not merely a procedural formality but an essential aspect of due process. It ensures the legal process remains fair & just. Further the Court have held that while computing 7 days period to give response to show cause notice, the date of receiving the notice and the holidays are to be excluded. In view of the above, as the minimum seven days requirement are mandatory requirement and failure to comply with would render a notice itself invalid. Therefore, on this ground alone, the notice would be vitiated resulting in quashment of not only the notice but also the subsequent assessment orders, penalty orders etc. 9.10 Further, in holding so, we also take a guidance & support from the judgment of Hon'ble jurisdictional High Court of Karnataka in the case of Panjos Builders (P) Ltd. V. Income Tax Officer [2024] 161 taxmann.com 573 (Karnataka....
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....itioner was directed to provide head-wise computation of income, details of purchase of immovable property during Financial Year 2015-16 supported with copy of registered agreement with annexure II, details of payment made and source of acquisition of said immovable property. 4. Petitioner submitted an elaborate reply on 18th March 2023 and also raised certain objections. The main objection raised was that under the provision of Section 148A(b) of the Act, the assessee should be provided an opportunity of being heard by serving upon the assessee a notice to show cause within such time as may be specified in the notice being not less than seven days but not exceeding thirty days from the date on which said notice has been issued. Since the notice dated 15th March 2023 provides only for five days when the law requires minimum seven days to be given, the notice itself was bad-in-law. 5. Along with reply, Petitioner also provided a photo copy of the notarised affidavit of Petitioner's brother affirmed on 18th March 2023, in which the brother has confirmed of giving gift of Rs. 75 lakhs to Petitioner on 26th March 2019, which is much beyond the relevant Assessment ....
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....information available suggests that income chargeable to tax has escaped assessment, the Assessing Officer shall provide an opportunity of being heard by assessee by issuing the show cause notice under section 148A(b) of the Act and the notice shall provide between seven to thirty days time for the assessee to submit their reply. A template of the show cause notice is also annexed to the guidelines. Therefore, in view of the guidelines, we would also read that the minimum seven days required to be made as a mandatory requirement and failure to comply with would render a notice itself invalid. Therefore, on this ground alone, the notice requires to be quashed and set aside. Perhaps, being aware of this position, Respondent No. 1 has chosen not to deal with these objections raised by Petitioner in the reply to the show cause notice. 10. We also found in the said guidelines a provision that the order under section 148A(d) of the Act shall be sent to assessee along with the approval of the specified authority for such order under section 148A(d) of the Act. In the case at hand, the approval that has been sent is of some other assessee and not Petitioner. This also ind....
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.... and the judgment of the Bombay High Court in Mukesh's case supra, I am of the considered opinion that the impugned notice at Annexure - A and also consequential proceedings, orders, notices, etc., deserves to be quashed by reserving liberty in favour of the respondents to take recourse to such remedies as available in law." 9.11 Now coming to the second legal ground as raised by the assessee that the AO's order u/s 148A(d) of the Act was completely blank and devoid of any contents & thus the entire proceedings is void-ab-initio and illegal. On plain reading of the provisions contained in section 148A(d) of the Act as above, the AO shall within one month as specified decide based on the material available on record including the reply of the assessee whether or not it is a fit case to issue a notice u/s 148 of the Act. 9.12 Before us, the AR of the assessee submitted that the AO's order u/s 148A(d) of the Act was completely blank and devoid of any contents which violates the basic ingredients of income escaping assessment & thus rendering the entire proceedings void- ab-initio and illegal. The order passed u/s 148A(d) of the act are reproduced below for the sake o....
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....ent into the making of the Order. It should be self-explanatory, clear cut. The Order u/s 148A(d) of the Act is in fact an interlocutory order and confers jurisdiction for assessment only when it declares that it is a fit case for the issue of notice u/s 148 of the Act. In the present case the order passed U/s 148A(d) is completely blank & devoid of any content and thus illegal & void-ab-initio. 9.15 Thus we have no hesitation to hold that the assessing officer acted in great haste in completing the assessment by allowing only 6 days' time to submit the response by the assessee & also uploaded the order u/s 148A(d) of the Act without deciding/adjudicating anything. The AO virtually condensed the procedure under the amended provision to a nullity. This clearly defeats the very purposes of new re-assessment scheme. 9.16 Under these circumstances, we hereby quash & set aside the notice dated 23/03/2022 issued under clause(b) of section 148A of the Act, the order dated 31/03/2022 passed under clause (d) of Section 148A of the Act as well as consequent Assessment order dated 04/03/2023 passed u/s 147 r.w.s 144 of the Act. We make it clear that since we have adjudicated the cas....