JUDGMENT :

K.R. SHRIRAM, J.

1. Rule. Rule made returnable forthwith as pleadings are completed.

Petitioner is registered with the Reserve Bank of India (RBI) as Non- Banking Finance Company and is classified as an Asset Finance Company.

On 28th November 2016, petitioner filed its return of income for A.Y.-2016- 2017 declaring a total income of Rs.44,92,46,370/-. Later petitioner filed revised return of income on 28th March 2018 declaring a total income of Rs.50,67,32,580/-.

2. The return of income was selected for scrutiny and a notice dated 5th September 2018 under Section 143(2) of the Income Tax Act 1961 (the Act) was issued. This was followed by notice dated 5th December 2018 under Section 142(1) of the Act. Petitioner responded by its letter dated 6th December 2018 and submitted the transaction wise summary on expenditure on software consumables. Respondent no.1 passed an assessment order dated 23rd December 2018 under Section 143(3) of the Act without making any adjustments to the total income as reported by petitioner in its revised return of income.

3. Almost three years later, petitioner received notice dated 25th June 2021 under Section 148 of the Act, stating that there was reason to believe, petitioner’s income chargeable to tax for A.Y. 2016-2017 has escaped assessment within the meaning of Section 147 of the Act. The impugned notice mentioned that necessary satisfaction of Range 8(2), Mumbai has been obtained. Petitioner was also provided with the reasons recorded for reopening the assessment in response to the request made by petitioner.

4. Petitioner by its letter dated 22nd July 2021 replied to the notice issued under Section 148 of the Act and submitted that the notice has been issued as per the provisions of Sections 147 to 151 of the Act as they stood prior to their substitution vide Finance Act, 2021 and respondent no.1 should assume jurisdiction post 1st April 2021 in terms of the amended provisions. Petitioner pointed out that the notice dated 25th June 2021 is bad in law and requested respondent no.1 to drop the assessment proceedings.

5. Petitioner was served with the notice dated 26th November 2021 under Section 142(1) of the Act. Petitioner responded vide its letter dated 20th December 2021. Thereafter, respondent no.1 issued the letter/show cause notice dated 31st May 2022 under Section 148A(b) of the Act, wherein respondent no.1 had referred to the notice issued on 25th June 2021 under Section 148 of the Act. In the said notice dated 31st May 2022, respondent no.1 referred to various writ petitions that had been filed in Bombay High Court as well as the other courts challenging the validity of the notices issued under Section 148 of the Act and also referred to the order of the Apex Court in Union of India Vs. Ashish Agarwal, (2022) 138 taxmann.com 64(SC) and stated that the notice under Section 148 of the Act shall be deemed to be issued under Section 148A of the Act as substituted by the Finance Act 2021 and shall be treated as show cause notice in terms of Section 148A(b) of the Act. Respondent no.1, therefore, treated the notice issued under Section 148 of the Act as show cause notice in terms of Section 148A(b) of the Act. Respondent no.1 also relied on information and material annexed to the show cause notice suggesting that the income chargeable to tax has escaped assessment within the meaning of Section 147 of the Act and also relied on the approval of the competent authority annexed to the impugned show cause notice.

6. The annexure to the impugned show cause notice mentioned the following:

a) On perusal of the records, it is noticed that the Petitioner has debited an amount of Rs. 6,41,87,931/- on account of software consumables as other expenses to the profit and loss account and as per the information gathered Respondent No. 1 alleged that the said expense is a capital expenditure which is not allowable as per section 37 of the Act and attracts depreciation at 60%. Thus, the remaining 40% of the