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IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA.
Tarlok Singh Chauhan, Sushil Kukreja, JJ.
Neena Singh Thakur – Petitioner
Versus
Pr. Commissioner of Income Tax & Anr. – Respondents
CWP No. 3681 of 2024
Decided On : 14-05-2025
(A) Income Tax Act, 1961 - Sections 148 and 148A(d) - Writ petition for quashing notices issued under Section 148A(d) and Section 148 - Court emphasizes the necessity of recording reasons for issuing notices under Section 148, highlighting that failure to do so amounts to denial of justice - The Assessing Officer must decide based on material on record and cannot merely state that further examination is required without justification. (Paras 5, 7, 13)
(B) Judicial Accountability - The requirement to record reasons is essential for transparency and fairness in decision-making, ensuring that decisions are not arbitrary and that affected parties understand the basis of decisions. (Paras 8, 11)
(C) Administrative Justice - The court reiterates that even administrative decisions must be reasoned to uphold the principles of natural justice and fair play. (Paras 10, 12)
Facts of the case:
The petitioner challenged notices issued under the Income Tax Act regarding undisclosed income from property transactions. The Assessing Officer failed to provide adequate reasoning for the conclusions drawn in the notice.
Findings of Court:
The court set aside the order of the Assessing Officer for lack of reasons and remanded the matter for fresh consideration, directing the officer to provide detailed reasons if a notice under Section 148 is deemed necessary.
Issues: The main issues included whether the Assessing Officer was required to provide reasons for issuing a notice under Section 148 and the implications of failing to do so.
Ratio Decidendi: The court ruled that the absence of reasons in the Assessing Officer's order constituted a denial of justice, emphasizing that reasons are critical for judicial accountability and transparency.
Result: The petition is disposed of, and the matter is remanded for fresh consideration.
JUDGMENT (Oral)
Tarlok Singh Chauhan, Judge
The instant petition has been filed for grant of the following substantive reliefs:-
“(i) That this Hon’ble Court may be pleased to issue a writ in the nature of certiorari and quash the orders dated 29.02.2024 passed under Section 148A(d) (Annexure P-6) of the Income Tax Act, 1961 holding the same to be illegal, arbitrary and contrary to the provisions of law.
(ii) This Hon’ble Court may further be pleased to issue a writ in the nature of certiorari and quash the notice under Section 148 of the Income Tax Act, 1961 (Annexure P-7) holding the same to be illegal and not sustainable in the eyes of law.”
2. Normally, the Courts are vary to interfere with the notice of the instant kind, however, the peculiar facts and circumstances of this case warrants interference given the fact that the petitioner was served with the notice under Section148A(d), the relevant portion whereof reads as under:-
“To
Neena Singh Thakur C/O Naveen Tanwar, Advocate
Gompa road Manali, Model Town, Manali, Kullu-175131
PAN ACAPT9245J | A.Y. 2017-18 | Dated 15/01/2024 | DIN & Notice No. ITBA/AST/F/148A(SCN)/2023 |
Notice under Clause (b) of Section 148A of the Income Tax, Act, 1961
Sir, Madam/M/s
Whereas I have information which suggests that income chargeable to tax for the Assessment Year 2017-18 has escaped assessment within the meaning of Section 147 of the Income tax Act, 1961. the details of the information/enquiry conducted on which reliance is being placed, alongwith the supporting documents, are enclosed with this notice.
2. You are required to show cause as to why, in view of the details contained in enclosures mentioned in point number 1 above, a notice under Section 148 of the Income Tax Act, 1961 should not be issued.
3. You may submit your reply to this notice alongwith supporting documents (if any) on the above mentioned issues on or before 25/01/2024 electronically at www.incometax. Gov. in.
Annexure Smt. Neena Singh Thakur PAN:-ACAPT9245J A.Y. 2017-18 As per the information available with this ofÏce it is noticed that during the Financial Year 2016-17 relevant to the Assessment Year 2017-18, you have purchased immovable property worth Rs. 1,21,00,000/-. In addition, you have also made payment of Rs. 1,21,00,000/- for purchase of immovable property and also earned interest income worth Rs. 35,109/- from Axis Bank Ltd. The details of which is as under:-
| Sr. No. | Information Code | Information Description | Information Source | Information Value |
| 1 | SFT-012(B) | Purchase by any person of immovable property | Joint Sub Registrar (MSD). Andheri 1 | 1,21,00,000/- |
| 2 | TD-1941A(P) | TDS Statement- Payment of consideration for purchase of immovable property (Section 1941A) | Neena Singh Thakur | 1,21,00,000/- |
| 3 | TDS-194A | TDS Statement- Interest other than interest on securities (Section 194A) | Axis Bank Ltd. | 35,109/- |
| Total | 2,42,35,109/- |
2. However, as per the record, no such transactions related to purchase of immovable properties (as mentioned above) appears to be declared in the Income Tax Return which has been filed by you manually on 22.09.2017 for the Assessment Year 2017-18. therefore, in the absence of proper record, the transactions related to purchase of immovable properties (as mentioned above) remained undisclosed and unexplained on your part. In this regard, to verify the above transactions you are requested to please furnish the following information/documents:-
| i) | Please provide/mention the details of your occupation/nature or business/source of income for the Financial Year 2016-17 relevant to the Assessment Year 2017-18. |
| ii) | Please furnish the details of all bank accounts (alongwith complete name and address of the bank branch as well as type of account and account number) maintained by you during the Financial Year 2016-17 relevant to the Assessment Year 2017- 18. Please also furnish the copies of all bank account statements for the period 01-04-2016 to 31.03.2017 with narration of each credit and credit entries. |
| iii) | In respect of immovable properties purchase, please e |
The necessity of recording reasons in administrative decisions is essential for transparency and fairness, and failure to do so constitutes a denial of justice.
Quasi-judicial authorities must provide reasons for their decisions to ensure fairness and prevent arbitrary actions.
An administrative authority must provide reasoned decisions to uphold natural justice, failing which orders become arbitrary and invalid.
The necessity for clear and specific reasons in reopening assessments under the Income Tax Act is paramount; vague reasons do not justify such actions.
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