The Assessing Officer must provide adequate opportunity and conduct thorough inquiries before issuing a notice under Section 148, ensuring compliance with statutory requirements.

Order :

AVNEESH JHINGAN, J :

1. This petition is filed seeking quashing of the notice dated 14.03.2022 issued under Section 148(b) of the Income Tax Act, 1961 (for short ‘the Act’) for the Assessment Year 2018-2019 and the order dated 31.03.2022 passed under Section 148A(d) of the Act.

Facts:

2. The brief facts are that the petitioner filed the return for the relevant assessment year declaring the income of Rs.2,39,47,140/-. A notice dated 14.03.2022 under Section 148A(b) of the Act was issued annexing the reason that in the assessment year 2018-19 there was a credit entry of Rs.4,50,00,000/- and debit entry of Rs.4,50,71,468/- in the bank account No.3042833. The petitioner in response dated 21.03.2022 stated that the petitioner has no bank account having the number mentioned in the notice. Further that the petitioner had a bank account with ICICI Bank, which was closed on 08.02.2010, the proof of closure of the bank account was enclosed. Order dated 31.03.2022 was passed holding that the objections are not tenable for the failure of ICICI Bank to respond to the notice issued on 25.03.2022 by the Assessing Officer (for brevity ‘AO’) under Section 133(6) of the Act.

Submissions:

3. Learned counsel for the petitioner argued that petitioner denied that the bank account mentioned in the notice belongs to it. The documents relating to closure of the bank account of the petitioner with the ICICI Bank were attached. The objections were decided in haste within six days of issuance of notice to bank. Submission is that the bank through an e-mail dated 06.04.2022 and 18.05.2022 responded to the notice of AO. The factum of closure of account of the petitioner with the ICICI Bank was accepted. Further it was stated that the account number mentioned in the notice does not exists with the bank.

4. Per contra the petitioner had not explained the entries in the account number mentioned in the notice rather had given a different account number which was closed. It is further submitted that the e-mail was received after passing of the impugned order.

Provisions & Guidelines:

Section 148A: [Conducting inquiry, providing opportunity before issue of notice under section 148.

The Assessing Officer shall, before issuing any notice under section 148:-

(a) conduct any enquiry, if required, with the prior approval of specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment;

(b) provide an opportunity of being heard to the assessee,[***], by serving upon him a notice to show cause within such time, as may be specified in the notice, being not less than seven days and but not exceeding thirty days from the date on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice under section 148 should not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a);

(c) consider the reply of assessee furnished, if any, in response to the show-cause notice referred to in clause (b);

(d) decide, on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under section 148, by passing an order, with the prior approval of specified authority, within one month from the end of the month in which the reply referred to in clause (c) is received by him, or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply as per clause (b) expires:

Provided that the provisions of this section shall not apply in a case where,-

(a) a search is initiated 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