IMPORTANT POINT
The central legal point established in the judgment is the requirement for actionable material and the significance of discrepancies in assessment proceedings under the Income Tax Act, 1961.

JUDGMENT

Rajiv Shakdher, J. (Oral) - Via the instant writ petition, a challenge is laid to the order dated 19.07.2022 passed under Section 148A(d) of the Income Tax Act, 1961 [in short, "Act"]. 1.1 Besides this, the petitioner also seeks to assail the consequential notice of even date, i.e., 19.07.2022, issued under Section 148 of the Act.

2. Both the impugned order and notice concern Assessment Year (AY) 2015-16.

3. The record shows that the principal allegation against the petitioner is that he is a beneficiary of accommodation entries provided by, one, Mr Rajnish Garg.

3.1. In this context, it is alleged that the petitioner was a beneficiary of Rs.50,94,24,738/- which, according to the respondents/revenue, stood credited in the bank accounts maintained with HDFC Bank and DCB Bank in the period in issue, i.e., Financial Year (FY) 2014-15 (AY 2015-16).

4. The record shows that this allegation was embedded in the notice dated 31.03.2021 issued to the petitioner under Section 148 of the Act, i.e., under the old regime, which obtained prior to the Finance Act 2021 [in short, "F.A. 2021"] being in force.

5. Concededly, F.A. 2021 was brought into force from 01.04.2021. The respondents/revenue claim that the aforementioned notice dated 31.03.2021 was issued to the petitioner on 02.04.2021. There is some significance to these dates and events, to which we will make a reference in the latter part of the judgment.

6. Continuing with the narrative, the petitioner was issued thereafter a notice dated 11.01.2022 under Section 142(1) of the Act. This was followed by a show cause notice-cum-draft assessment order dated 12.03.2022 being served on the petitioner. Paragraph 5 of the said show cause notice-cum-draft assessment order would show that a proposal to add Rs.50,94,24,738/- to the income of the petitioner (based on the allegations which were contained in the notice dated 31.03.2021) was made under Section 148 of the Act.

7. Concededly, the petitioner filed a reply to the aforementioned show cause notice-cum-draft assessment order. This reply is dated 15.03.2022. Inter alia, the petitioner took the stand that he did not maintain any account with HDFC Bank and DCB Bank, as alleged or at all.

7.1. Furthermore, in this context it was pointed out by the petitioner that he had received information from the said banks which indicated that the bank account numbers allocated by the said banks had 14 digits, whereas as per the information supplied by the respondents/revenue, the bank account numbers carried 13 digits.

7.2. Thus, according to the petitioner, some mischief had been played against him as he had nothing to do with Mr Rajnish Garg, who, according to the respondents/revenue, was the source of entries credited in the bank accounts referred to hereinabove, i.e., the bank accounts maintained with HDFC Bank and DCB Bank.

8. Pursuant to the reply, the Assessing Officer (AO) passed a reassessment order dated 22.03.2022 under Section 147 read with Sections 144 and 144B of the Act. Interestingly, in the concluding part of the said reassessment order, there is nothing to suggest that any addition was made qua the petitioner. This is evident if one were to peruse paragraphs 5 and 6 of the said order. For the sake of convenience, the said paragraphs are extracted hereafter:

"5. Accordingly, a show cause notice u/s 144 of Income Tax Act,1961 along with "Draft Assessment Order" issued to assessee on 12.03.2022 to provide one more opportunity for furnishing any explanation in this case, fixing the date of compliance on or before 18.03.2022. In compliance assessee submitted its reply on 15.03.2022 along with Bank Statements with narrations, copy of ITR-V, Computation of Income etc.

6. After perusing all the details & documents furnished by assessee, assessment in this case for A.Y. 2015-16 is being completed u/s 144/147 of Income Tax Act, 1961 at return income. Notice of demand and challan are being issued as per the procedure."

9. However, the demand notice is