Proper verification of information collected through sources, duty of the authority to objectively consider the assessee's reply, and the necessity to disclose specific details in the notice to enable the assessee to explain the transactions.

ORDER :

C. Praveen Kumar, J.

1. Assailing the Order made under Clause (d) of Section 148A of Income Tax Act, 1961 [‘the Act’], wherein the Authority on coming to the conclusion that, income chargeable to tax, which is in the form of an asset, is likely to amount to Rs.50,00,000/- or more, which escaped the assessment, leading to issuance of notice under Section 148 of the Act, the present Writ Petition is filed.

2. The facts, in issue, are as under :

i. The Petitioner herein is involved in business of Fish farming. Basing on the information received under the category of ‘NMS Module of insight portal’ and as no declaration was filed for the assessment year 2015-2016, the Petitioner’s case was taken up by the first Respondent under Section 148A(a) of the Act.

ii. A Notice came to be issued under Section 148A(b) of the Act, on 20.03.2022 i.e., before the end of the period of six [06] years from the end of the relevant assessment year, to which the Petitioner is said to have submitted an explanation under Section 148A(c) of the Act, on 21.03.2022. Taking into consideration the explanation submitted by the Petitioner, the Authorities felt that it is a fit case for issuance of notice under Section 148 of the Act, for the assessment year 2015-2016. This Order is sought to be challenged in the present Writ Petition, on various grounds.

3. (i) The learned Counsel for the Petitioner mainly submits that, the primary condition under Section 149 of the Act, to issue a notice is not satisfied, as the Assessing Officer was not in possession of books of account or other documents to find out the income chargeable to tax, escaped the assessment amounts or that the amount is likely to cross Rs.50,00,000/-.

(ii) It is further stated that, as per Section 148A(b) and (d) of the Act, the expression “shall verify” mandates proper verification by the Assessing Officer of the information collected through sources, such as Central Information Branch [‘CIB’] and Annual Information Return [‘AIR’], and that the Revenue should not treat verification procedure as an empty formality, more so, having regard to the instructions issued by CBDT, dated 22.08.2022.

(iii) The Counsel also submits that, when the Petitioner has raised objection under Section 148A(c) of the Act, in his reply, dated 21.03.2022, it is the duty of the first Respondent to properly verify the same and even the second Respondent cannot mechanically grant approval. In-fact, it is stated that, instructions were given by CBDT, directing their Officers to consider the Assessee’s reply objectively before adjudicating the same. The learned Counsel would contend that, none of these procedural aspects were dealt with by the Authority while dealing with the same.

(iv) Even on merits, the learned Counsel would contend that, the information received by the Department under two heads i.e., AIR and CIB show that the Petitioner has deposited Rs.25,00,000/- and Rs.26,00,000/- respectively, into the same bank account, which is Andhra Bank, is far from truth and without any basis. According to him, the amount under AIR takes within its fold the amount covered under the head CIB. In other words, his plea appears to be that the same amount is shown twice under two different heads vide two different annual returns, which escalated the amount carrying to Rs.51,00,000/-. In-fact, the Authorities ought to have given an opportunity to explain this contingency before passing the impugned order. It is stated that along with the explanation, the Petitioner filed the bank accounts showing that he has deposited only Rs.26,00,000/- into his bank account and that he has only one bank account in Andhra Bank at Kaikaluru. According to him, things would have been different if the AIR disclosed the bank account number, which would have enabled the Petitioner to explain the same.

(v) The notice given also does not indicate the Branch of the Andhra Bank, where the Petitioner is alleged to have deposited Rs.26,00,000/-, and since no acc