The Division Bench of the Delhi High Court in the case of Mahashian Di Hatti Pvt. Limited vs Deputy Commissioner of Income Tax consisting of Justices Manmohan and Manmeet Pritam Singh Arora opined that an Assessing Officer must provide specific material and information to the Assessee in the notice issued u/s 148A(b) of the Income Tax Act, 1961 (“the Act”) so that the Assessee can provide a meaningful response at the stage of inquiry u/s 148A proceedings.
Facts
The writ petition was filed challenging the notice issued u/s 148A(b) of the Act and the order passed u/s 148A(d) of the Act and the notice issued u/s 148 of the Act for the Assessment Year 2014-15.
Contentions Made
Petitioner: It was contended that the Respondent failed to comply with the direction of the Supreme Court in the case of Union of India vs. Ashish Agarwal since it made far-fetched allegations without any supporting evidence. It was further contended that there has been violation of principles of natural justice as the Petitioner has been denied an effective opportunity to rebut the information available with the Assessing Officer.
Observations of the Court
The Bench relying on Divya Capital One Private Limited v. ACIT & Ors., opined that:
“To give effect to the objective of the scheme of Section 148A of the Act, the Assessing Officer must provide specific material and information to the Assessee in the notice issued u/s 148A(b) of the Act so that the Assessee can provide a meaningful response at the stage of inquiry u/s 148A proceedings.”
Consequently, as the show cause notice issued u/s 148A(b) of the Act as well as the subsequent notice were bereft of any details, it noted that the Revenue, by asking the Petitioner-Assessee to respond to the aforesaid vague show cause notice, was virtually asking it to search for ‘a needle in a haystack’.
Judgment
Since the counsel for the Respondent (Revenue) stated that the Respondent shall supply all the relevant material documents and information in its possession, the Bench found it suitable to set aside the impugned order passed under Section 149A(d) of the Act as well as the notice issued under Section 148 of the Act with a direction to the Respondent to issue a supplementary notice in pursuance to the initial notice issued u/s 148A(b) of the Act, within three weeks enclosing all the relevant/incriminating information/material/documents.
Case: Mahashian Di Hatti Pvt. Limited vs Deputy Commissioner of Income Tax
Citation: W.P.(C) 12505/2022
Bench: Justice Manmohan, Justice Manmeet Pritam Singh Arora
Decided on: 1st September 2022
Read Judgment ;
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