# Deepak Kumar Yadav v. Principal Commissioner of Income Tax, Allahabad & Anr

- **Citation:** (2023) 6 ILRA 524
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2023-05-05
- **Case number:** Writ-Tax No. 561 of 2023
- **Bench:** Ashwani Kumar Mishra, Shiv Shanker Prasad
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/deepak-kumar-yadav-v-principal-commissioner-of-income-tax-allahabad-anr-50316
- **Pages:** 12

## Headnote

A. Tax Law - Income Tax Act, 1961 -
Sections 148, 148A(d) & 246-A - Finance
Act, 2021 - Show cause notice u/s 148-A(b)
- Scheme for Re-assessment of tax -
Amendment made in Ss. 147 and 148 -
Requirement of 'reasons to believe' for
initiating
re-assessment
proceedings
hitherto
occurring
in
the
Act
stands
substituted
with
the
availability
of
information with the Assessing Officer that
income of assessee has escaped assessment
- Effect - Jurisdiction of assessing authority
- Scope of decision u/s 148-A(d) explained
- Held, the order passed by the Assessing
Officer u/s 148A(d) of the Act regarding
existence of information suggesting that
income chargeable to tax has escaped
assessment would otherwise remain subject
to reassessment order passed under section
148 of the Act - Any observations of the
assessing authority while passing order
under section 148A(d) with regard to merits
of assessment of income would remain
subject to the order to be ultimately passed
in reassessment proceedings u/s 148. (Para
8 and 24)

Writ petition dismissed. (E-1)

List of Cases cited:

## Text

_Characters 0–39,995 of 40,024. This is a partial read: ask again with offset=39995 for what follows._

524 INDIAN LAW REPORTS ALLAHABAD SERIES
that statements recorded by the police
authorities during the course of investigation
cannot be made basis for proving the charge in
domestic inquiry against the charged employee
unless witnesses are examined before the
enquiry officer. In paragraph 25 of the order, it
was observed that the charge no.3 is not proved
as the statements of the witnesses recorded
before police authorities is of no help to prove
the charge no.3 against the worker.

48. In view of the above, once service
rules (herein the Memorandum of Settlement)
specifically take care of commencement,
pendency, culmination and the conclusion of
the departmental proceedings vis-a-vis criminal
prosecution, the general principle that criminal
trial and departmental proceedings can run
simultaneously cannot be strictly applied atleast
against the petitioner, otherwise it would be a
case where the general conceptions would
override specific service rules which, in the
opinion of the Court, is not permissible.

49. In view of the above discussion, I find
that the departmental authorities should not
have commenced the departmental proceedings
against the petitioner as the charge sheet in the
criminal case had been submitted within a
period of one year and even if, by any stretch of
imagination, it is held that the departmental
proceedings could commence, they were bound
to be stayed awaiting decision of the criminal
trial. The same having not been done and the
effect of judgment of acquittal as well as the
clause 19.3 and 19.4 of the Settlement of 1966
and identical clauses of settlement having not
been given any consideration, the order
impugned does not sustain and is liable to be
quashed.

50. Accordingly, the writ petition
succeeds and is partly allowed. The
impugned award dated 19.07.2016 passed by
the Industrial Tribunal-cum-Labour Court,
Kanpur, contained in Annexure No.19 to the
writ petition, as well as the orders 26.10.2004
and 19.01.2005 respectively passed by the
Assistant General Manager and the Deputy
General Manager, as contained in Annexures
9 and 11 to the writ petition, are hereby
quashed.

51. Since the petitioner, even on the date
of filing of petition had attained the age of
superannuation, relief of his reinstatement in
service cannot be granted. Considering the
simultaneous effect of all the proceedings as
well as age of the petitioner at the time of
passing of the award, it is provided that the
petitioner shall be entitled to entire arrears of
salary and consequential benefits with effect
from the date of termination of his services till
the date of his superannuation but without any
interest.

52. The petitioner shall also be paid his
post retiral benefits along with 6% simple
interest from the date of his retirement till date
of actual payment computed accordingly within
a period of three months from the date a
certified copy of this order is produced before
the respondent-bank.

53. No order as to costs.
----------
(2023) 6 ILRA 524
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 05.05.2023

BEFORE

THE HON'BLE ASHWANI KUMAR MISHRA, J.
THE HON'BLE SHIV SHANKER PRASAD, J.

Writ-Tax No. 561 of 2023

Deepak Kumar Yadav ...Petitioner
Versus
Principal Commissioner of Income Tax,
Allahabad & Anr. ...Respondents
6 All. Deepak Kumar Yadav Vs. Principal Commissioner of Income Tax, Allahabad & Anr.
525
Counsel for the Petitioner:
Sri Ashish Bansal

Counsel for the Respondents:
Sri Gaurav Mahajan

A. Tax Law - Income Tax Act, 1961 -
Sections 148, 148A(d) & 246-A - Finance
Act, 2021 - Show cause notice u/s 148-A(b)
- Scheme for Re-assessment of tax -
Amendment made in Ss. 147 and 148 -
Requirement of 'reasons to believe' for
initiating
re-assessment
proceedings
hitherto
occurring
in
the
Act
stands
substituted
with
the
availability
of
information with the Assessing Officer that
income of assessee has escaped assessment
- Effect - Jurisdiction of assessing authority
- Scope of decision u/s 148-A(d) explained
- Held, the order passed by the Assessing
Officer u/s 148A(d) of the Act regarding
existence of information suggesting that
income chargeable to tax has escaped
assessment would otherwise remain subject
to reassessment order passed under section
148 of the Act - Any observations of the
assessing authority while passing order
under section 148A(d) with regard to merits
of assessment of income would remain
subject to the order to be ultimately passed
in reassessment proceedings u/s 148. (Para
8 and 24)

Writ petition dismissed. (E-1)

List of Cases cited:

1. Larsen & Turbo Ltd. Vs St. of Jharkhand; (2017)
13 SCC 780. Paragraph nos.26, 27 and 32

2. Red Chilli International Sales Vs Income Tax
Officer, [2023] 146 taxmann.com 224 (SC),

3. Anshul Jain Vs Pr. CIT, [2022] 143
taxmann.com 37

4. Anshul Jain Vs Pr. CIT, [2022] 143
taxmann.com 38

(Delivered by Hon'ble Ashwani Kumar
Mishra, J.
&
Hon'ble Shiv Shanker Prasad, J.)

1. Petitioner is an individual who is
engaged in the business of trading of
Arecanut (Supari), Chopped Betal Nut and
Sweet Betal Nut in the name of his
proprietary
concern
namely
"S.K.L.
Enterprises". He alleges that his Books of
Account and other records are subject to
audit under Section 44AB of the Income
Tax Act, 1961 (hereinafter referred to as
the 'Act of 1961'). He further claims to be
filing his return year after year and has
been assessed to tax accordingly. For the
Assessment Year 2019-20, the petitioner
filed his return under Section 139(1) of the
Act on 26.08.2019 disclosing total income
of Rs. 6,81,630/-. The turnover during the
year
from
his
proprietary
concern
aggregated
to
Rs.
5,87,26,116/-
and
aggregate
purchases
are
of
Rs.
5,81,61,860/-. He further asserts that he has
been assessed under Section 143(1) of the
Act on the basis of return submitted by him
on 26.08.2019 and no notice has been
issued to him under Section 143(2) of the
Act.

2. It transpires that the jurisdictional
authority i.e. respondent no. 2 issued a
notice to petitioner dated 16.03.2023, under
Section
148A(b)
of
the
Act,
1961
accompanying the information with the
assessing officer to suggest that income
chargeable to tax has escaped assessment.
The
substance
of
the
information
accompanying the notice is extracted
hereinafter:-

"1(A) Information was received
by DDIT (Inv.), Unit-III, Nagpur from
DGGI and GST authorities in the case of
M/s Kuhoje K Achumi of availing and
utilization of fraudulent ITC on the basis of
526 INDIAN LAW REPORTS ALLAHABAD SERIES
fake tax invoices without receipt of goods.
The said entity did not exist at the declared
principal place of business. On the basis of
the above information, the Investigation
Unit-III, Nagpur took up investigation and
inferred that M/s Kuhoje K Achumi has
facilitated and is involved in both availing
of fake invoices without actual supply of
goods and in turn in issuing fake invoices
to others without actual supply of goods.
Aforesaid facts imply that the parties which
have claimed to have availed purchases
from M/s Kuhoje K Achumi have only
indulged in availing of purchase invoices
without any actual movement of goods and
by doing so, they have artificially inflated
their purchase expenses and reduced their
taxable income. You are reported as one of
such
suspicious
purchasers
and
the
purchase value in your case for F.Y. 201819 relevant to A.Y. 2019-20 is Rs.
96,43,750/- from M/s Kuhoje K Achumi.

(B) Similarly, Information was
received by DDIT (Inv.), Unit-III, Nagpur
from CBDT, in the case of M/s Om Traders
(Prop. Jasbir Singh Chatwal) of availing
fraudulent ITC. On the basis of the above
information, the Investigation Unit-III,
Nagpur took up investigation and it is
found that M/s Om Traders (Prop. Jasbir
Singh Chatwal) has indulged in availing
fake tax invoices which implies that there is
no actual movement of goods to M/s Om
Traders. Further, M/s Om Traders has
made sales to number of entities. Since M/s
Om Traders is indulged in fictitious
purchases, therefore, the sales are also
fictitious as he has no goods to make sale to
other entities. Therefore, the entities who
have claimed to have availed purchases
from M/s Om Traders (Prop. Jasbir Singh
Chatwal) has merely inflated their purchase
expenses by availing invoices from M/s
Om Traders (Prop. Jasbir Singh Chatwal)
without actual movement of goods. You are
reported as one of such suspicious
purchasers and the purchase value in your
case from F.Y. 2018-19 relevant to A.Y.
2019-20 is Rs. 83,25,000/- from M/s Om
Traders (Prop. Jasbir Singh Chatwal).

(C) In addition there is third party
information which is as under:-

Inform
ation
Code
Inform
ation
Descri
ption
Source
Cou
nt
A
m
ou
nt
De
sc
ri
pti
on
A
m
ou
nt
(R
s.)
SFT003(w)
Cash
withdra
wals
(includi
ng
though
bearers
cheque)
in
current
account
PUNJA
B
NATIO
NAL
BANK
1
A
gg
re
ga
te
gr
os
s
a
m
ou
nt
re
cei
ve
d
fro
m
pe
rs
on
in
ca
sh
23,
85,
00
0
TCS206CL
TCS
stateme
nt-sale
of
motor
vehicle
accedin
g
Rs.
10
Lakhs
(section
206C)
GREE
NLAN
DS
(AM)
CORP
ORATI
ON
1
To
tal
va
lu
e
of
tra
ns
act
io
n
16,
00,
00
0
6 All. Deepak Kumar Yadav Vs. Principal Commissioner of Income Tax, Allahabad & Anr.
527
SFT003(D)
Cash
deposit
s
(includi
ng
though
SFT003(D)
bearers
cueque)
in
current
account
PUNJA
B
NATIO
NAL
BANK
1
A
gg
re
ga
te
gr
os
s
a
m
ou
nt
re
cei
ve
d
fro
m
pe
rs
on
in
ca
sh
4,7
0,4
0,0
00
Total:

5,1
0,2
5,0
00

3. Petitioner was accordingly given an
opportunity under Section 148A(b) of the
Act to show cause as to why a notice under
Section 148 of the Act be not issued to him
on the basis of information which suggests
that income chargeable to tax of Rs.
96,43,750/- + Rs. 83,25,000/- + Rs.
5,10,25,000/- aggregate Rs. 6,89,93,750/-
has escaped assessment for the Assessment
Year 2019-20.

4. In response to the above notice
the petitioner has filed a detailed
objection before the respondent no. 2 on
24.04.2023 denying the allegations made
in the notice. A request has also been
made for providing the information
relied
upon
for
invoking
such
proceedings as well as to provide
opportunity of cross-examination of the
said suppliers.

5. The jurisdictional authority has
proceeded to pass an order on 29.3.2023
under Section 148(d) of the Act rejecting
the petitioner's objection to the notice on
the ground that information exists to
suggest that transactions referred to in the
notice are fictitious and without actual
supply of goods. Consequently, petitioner's
purchases are treated as fictitious for the
Financial Year 2018-19 amounting to Rs.
1,79,68,750/-. This amount has been treated
as having escaped assessment for the year
2019-20 for the purposes of initiating
proceeding under Section 148 of the Act.
Petitioner's request for cross-examination
of suppliers and furnishing of material has
been declined considering the time-barring
nature of the matter. A consequential notice
has also been issued to petitioner on
29.03.2023, under Section 148 of the Act.
Aggrieved by the order under Section
148A(d) of the Act, dated 29.03.2023 as
well as notice of the same date i.e.
29.3.2023 issued under Section 148 of the
Act, the petitioner has approached this
Court.

6. Sri Ashish Bansal for the petitioner
submits that the authority concerned has
not examined the petitioner's reply to the
notice, on merits, and the order impugned
has been passed in a routine and
mechanical
manner.
Learned
counsel
further submits that object of issuing notice
under Section 148A of the Act would stand
frustrated, if the authority does not examine
the reply of the assessee in response to the
show cause notice referred to in Clause (b)
and passes an order without conducting any
enquiry. It is urged that the manner in
which the order has been passed renders the
object of issuing notice under Section 148A
of the Act nugatory. In support of such
contention, counsel for the petitioner has
placed reliance upon an order passed by the
528 INDIAN LAW REPORTS ALLAHABAD SERIES
Supreme Court of India in Red Chilli
International Sales Vs. Income-tax Officer
reported in [2023] 146 taxmann.com 224
(SC). He further places reliance upon an
order passed by the Bombay High Court in
Writ Petition No. 2836 of 2022, decided on
13.03.2023.

7. Per-contra, Sri Gaurav Mahajan
appearing for the revenue submits that the
object of issuing notice under Section 148A
of the Act is limited to ascertainment of
information which suggests that income has
escaped assessment and issues such as
sufficiency
or
otherwise
of
material
justifying reopening of assessment or
adjudication
on
the
correctness
of
information are ordinarily not warranted at
this stage, in exercise of extraordinary writ
jurisdiction.
The
limited
enquiry
contemplated at this stage is to ascertain
existence of information which suggests
that income has escaped assessment. It is
submitted that in the facts of this case such
information does exist on record. It is also
argued that petitioner would be at liberty to
raise all factual issues/objections at the
appropriate stage of the proceedings, and as
no prejudice otherwise is caused to him,
this Court would not be justified in
embarking
upon
the
correctness
or
otherwise of the information available with
the Assessing Officer while taking decision
under Section 148A(d) of the Act.

8. The scheme for re-assessment of
tax under the Act of 1961 has undergone a
change with effect from April 1, 2021 vide
Finance Act, 2021. The requirement of
'reasons to believe' for initiating reassessment proceedings hitherto occurring
in the Act stands substituted with the
availability
of
information
with
the
Assessing Officer that income of assessee
has escaped assessment. Amended sections
147 and 148 of the Income Tax Act, 1961
as well as section 148A introduced in the
Act of 1961 vide Finance Act 2021 are
reproduced hereinafter:-

"147.
Income
escaping
assessment. - If any income chargeable to
tax, in the case of an assessee, has escaped
assessment for any assessment year, the
Assessing Officer may, subject to the
provisions of sections 148 to 153, assess or
reassess such income or recompute the loss
or the depreciation allowance or any other
allowance or deduction for such assessment
year (hereafter in this section and in
sections 148 to 153 referred to as the
relevant assessment year).

Explanation. - For the purposes
of
assessment
or
reassessment
or
recomputation under this section, the
Assessing Officer may assess or reassess
the income in respect of any issue, which
has escaped assessment, and such issue
comes to his notice subsequently in the
course of the proceedings under this
section, irrespective of the fact that the
provisions of section 148A have not been
complied with.]

148. Issue of notice where
income has escaped assessment. - Before
making the assessment, reassessment or
recomputation under section 147, and
subject to the provisions of section 148A,
the Assessing Officer shall serve on the
assessee a notice, along with a copy of the
order passed, if required, under clause (d)
of section 148A, requiring him to furnish
within such period, as may be specified in
such notice, a return of his income or the
income of any other person in respect of
which he is assessable under this Act
during the previous year corresponding to
the relevant assessment year, in the
prescribed form and verified in the
prescribed manner and setting forth such
6 All. Deepak Kumar Yadav Vs. Principal Commissioner of Income Tax, Allahabad & Anr.
529
other particulars as may be prescribed; and
the provisions of this Act shall, so far as
may be, apply accordingly as if such return
were a return required to be furnished
under section 139:

Provided that no notice under
this section shall be issued unless there is
information with the Assessing Officer
which suggests that the income chargeable
to tax has escaped assessment in the case of
the assessee for the relevant assessment
year and the Assessing Officer has obtained
prior approval of the specified authority to
issue such notice.

Provided further that no such
approval shall be required where the
Assessing Officer, with the prior approval
of the specified authority, has passed an
order under clause (d) of section 148A to
the effect that it is a fit case to issue a
notice under this section.

Explanation 1. - For the purposes
of this section and section 148A, the
information with the Assessing Officer
which suggests that the income chargeable
to tax has escaped assessment means,-

(i) any information in the case of
the assessee for the relevant assessment
year
in
accordance
with
the
risk
management strategy formulated by the
Board from time to time;

(ii) any audit objection to the
effect that the assessment in the case of the
assessee for the relevant assessment year
has not been made in accordance with the
provisions of this Act; or

(iii) any information received
under an agreement referred to in section
90 or section 90A of the Act; or

(iv)
any
information
made
available to the Assessing Officer under the
scheme notified under section 135A; or

(v)
any
information
which
requires action in consequence of the order
of a Tribunal or a Court.

Explanation 2. - For the purposes
of this section, where,-

(i) a search is initiated under
section 132 or books of account, other
documents or any assets are requisitioned
under section 132A, on or after the 1st day
of April, 2021, in the case of the assessee;
or

(ii) a survey is conducted under
section 133A, other than under sub-section
(2A) of that section, on or after the 1st day
of April, 2021, in the case of the assessee;
or

(iii) the Assessing Officer is
satisfied, with the prior approval of the
Principal Commissioner or Commissioner,
that any money, bullion, jewellery or other
valuable
article
or
thing,
seized
or
requisitioned under section 132 or under
section 132A in case of any other person on
or after the 1st day of April, 2021, belongs
to the assessee; or

(iv) the Assessing Officer is
satisfied, with the prior approval of
Principal Commissioner or Commissioner,
that any books of account or documents,
seized or requisitioned under section 132 or
section 132A in case of any other person on
or after the 1st day of April, 2021, pertains
or pertain to, or any information contained
therein, relate to, the assessee,

the Assessing Officer shall be
deemed to have information which suggests
that the income chargeable to tax has
escaped assessment in the case of the
assessee the search is initiated or books of
account, other documents or any assets are
requisitioned or survey is conducted in the
case of the assessee or money, bullion,
jewellery or other valuable article or thing
or books of account or documents are
seized or requisitioned in case of any other
person.

Explanation 3. - For the purposes
of this section, specified authority means
530 INDIAN LAW REPORTS ALLAHABAD SERIES
the specified authority referred to in section
151.]

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
require, 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 service 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 showcause 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, with the prior approval of the
Principal Commissioner or Commissioner
that any money, bullion, jewellery or other
valuable article or thing, seized in a search
under section 132 or requisitioned under
section 132A, in the case of any other
person on or after the 1st day of April,
2021, belongs to the assessee; or

(c) the Assessing Officer is
satisfied, with the prior approval of the
Principal Commissioner or Commissioner
that any books of account or documents,
seized in a search under section 132 or
requisitioned under section 132A, in case
of any other person on or after the 1st day
of April, 2021, pertains or pertain to, or any
information contained therein, [relate to,
the assessee; or

(d) the Assessing Officer has
received any information under the scheme
notified under section 135A pertaining to
income
chargeable
to
tax
escaping
assessment for any assessment year in the
case of the assessee.]

Explanation. - For the purpose of
this section, specified authority means the
specified authority referred to in section
151."

9. Reading of Section 148A reveals
that the assessing authority shall, before
issuing any notice under section 148
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. On receipt of such
information the assessing officer is required
to provide an opportunity of being heard to
the assessee, in the manner specified, as to
6 All. Deepak Kumar Yadav Vs. Principal Commissioner of Income Tax, Allahabad & Anr.
531
why a notice under Section 148 of the Act
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 as per
clause (a), if any. The assessing authority is
then required to consider the reply of the
assessee, if any, in response to the show
cause notice referred to in Clause (b). It is
thereafter that the assessing authority has to
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 in the manner specified. The proviso
exempts the category of cases which are
not covered by Section 148A. The proviso
to section 148A has no applicability in the
facts of the present case and, therefore, it
does not require any examination.

10. The statutory scheme is, therefore,
clear that the assessing authority on receipt
of information which suggests that the
income chargeable to tax has escaped
assessment may conduct any enquiry in the
matter, if required, and then provide an
opportunity of being heard to the assessee
by serving upon him a notice under clause
(b). On receipt of reply of assessee to the
notice referred to in clause (b) the assessing
officer on the basis of material available on
record including the reply of assessee
decide whether or not it is a fit case to issue
a notice under Section 148.

11. The scheme for reassessment of
escaped income introduced vide Finance
Act, 2021 provides for an opportunity to
the assessee before issuance of notice under
section 148 of the Act of 1961. After such
notice to the assessee and consideration of
reply of assessee in response to the notice
the assessing authority has to decide on the
basis of material available on record by
passing an order under section 148A(d)
whether a notice under section 148 is fit to
be issued in the case. The consideration at
the stage of passing order under section
148A(d) is thus limited to ascertainment of
information with the Assessing Officer that
income of assessee has escaped assessment
to tax. Final determination on the question
whether income of assessee has actually
escaped assessment is then to be made after
notice under section 148, by passing an
order of assessment or reassessment under
section 147, subject to the provisions of
section 148 to 153 of the Act of 1961.

12. The Act of 1961 does not
contemplate any detailed adjudication on
the merits of information available with the
Assessing Officer at the stage of passing
order under section 148A(d) of the Act of
1961. In our considered view there is a
specific purpose for not introducing any
further enquiry or adjudication in the
statute, on the correctness or otherwise of
the information, at this stage. The reason
for it is obvious. Under the scheme of the
Act a detailed procedure has been provided
under Section 148 for issuance of notice
whereafter the assessing authority has to
determine, in the manner specified, whether
income has escaped assessment and the
defence of assessee, on all permissible
grounds, remains open to be pressed at
such stage. The ultimate determination
made by the assessing authority under
Section 147 for reassessment is otherwise
subject to appeal under Section 246-A of
the Act. Merits of the information referable
to Section 148A thus remains subject to the
reassessment proceedings initiated vide
notice under Section 148 of the Act. It is
for this reason that issues which require
determination at the stage of reassessment
proceedings and in respect of which
532 INDIAN LAW REPORTS ALLAHABAD SERIES
departmental remedy is otherwise available
are not required to be determined at the
stage of decision by the assessing authority
under Section 149A(d). The scope of
decision under Section 148A(d) is limited
to the existence or otherwise of information
which suggests that income chargeable to
tax has escaped assessment.

13. In the facts of the present case, it
transpires that petitioner in his return has
shown various purchases of arecanut
(supari) from M/s Kuhoje K Achumi and
M/s Om Traders. The order under clause
(d)
of
Section
148A
records
that
investigating wing of DGGI and GST have
informed the Income Tax Authorities that
M/s Kuhoje K Achumi and M/s Om
Traders are found availing and utilizing
fraudulent ITC on the basis of fake tax
invoices without receipt of goods. It has
also been found that the said entity (the
seller) does not exist at all at the declared
principal place of business. It is from such
doubtful units that the petitioner claims to
have made purchases amounting to Rs.
1,79,68,750/-. Though the petitioner has
alleged that his Books of Account truly
reflects these transactions and that goods
have been received by way of e-challan,
etc., but such defence on merits of the
information
is
not
expected
to
be
authoritatively determined by the assessing
authority at the stage of decision under
section
148A(d).
The
forum
for
determining correctness or otherwise of the
information on the basis of defence setup
by the assessee would be the assessment
proceedings under Section 148 of the Act.
On the basis of materials which are referred
to in the order of the assessing authority
under clause (d) of Section 148A, it cannot
be doubted that information did exist with
the authorities suggesting that the income
chargeable to tax has escaped assessment.
The formation of opinion by the authority
concerned
under
section
148A(d),
therefore, cannot be questioned on the basis
of detailed defence setup by the assessee on
the merits of the information, including
opportunity of cross-examining the seller or
by demanding the documents relating to
such information.

14. It is only to the extent of
availability or otherwise of information
suggesting
that
income
has
escaped
assessment that the scope of enquiry rests
under Section 148A(d). The correctness or
otherwise of information is an aspect to be
gone into later by the assessing authority at
the stage of proceedings under Section 148
of the Act for reassessment. Any other
interpretation,
in
our
view,
is
not
countenanced in the scheme of the Act of
1961.

15. The information with the
Assessing Officer which suggests that the
income chargeable to tax has escaped
assessment has been defined in Explanation
1 to the second proviso to section 148 of
the Act which is already extracted above.
There is no challenge to the information
contained in the notice under section
148A(b) of the Act on the ground that the
information available with the Assessing
Officer is not referable to Explanation 1 to
the second proviso to section 148 of the
Act. The Finance Act, 2021 is otherwise
not under challenge. We are, therefore, of
the considered opinion that the challenge to
the information, by the assessee, on the
defence setup in reply to show cause notice
merits no further consideration at the stage
of decision under section 148A(d) of the
Act.

16. The term 'information' for the
purposes of reopening of assessment has
6 All. Deepak Kumar Yadav Vs. Principal Commissioner of Income Tax, Allahabad & Anr.
533
been examined in Larsen & Turbo Ltd. vs.
State of Jharkhand, (2017) 13 SCC 780.
Paragraph nos.26, 27 and 32 of the report
are apposite for the present purposes and
are reproduced hereinafter:-

"26. It is also pertinent to
understand the meaning of the word
"information" in its true sense. According
to Oxford Dictionary, "information" means
facts told, heard or discovered about
somebody/something. The Law Lexicon
describes the term "information" as the act
or process of informing, communication or
reception of knowledge. The expression
"information"
means
instruction
or
knowledge derived from an external source
concerning facts or parties or as to law
relating to and/or having a bearing on the
assessment. We agree that a mere change
of opinion or having second thought about
it by the competent authority on the same
set of facts and materials on the record
does not constitute "information" for the
purposes of the State Act. But the word
"information" used in the aforesaid section
is of the widest amplitude and should not
be construed narrowly. It comprehends not
only
variety
of
factors
including
information from external sources of any
kind but also the discovery of new facts or
information available in the record of
assessment not previously noticed or
investigated. Suppose a mistake in the
original order of assessment is not
discovered by the assessing officer, on
further scrutiny, if it came to the notice of
another assessor or even by a subordinate
or a superior officer, it would be
considered as information disclosed to the
incumbent officer. If the mistake itself is not
extraneous to the record and the informant
gathered the information from the record,
the immediate source of information to the
officer in such circumstances is in one
sense extraneous to the record. It will be
information in his possession within the
meaning of Section 19 of the State Act. In
such cases of obvious mistakes apparent on
the face of the record of assessment, that
record
itself
can
be
a
source
of
information, if that information leads to a
discovery or belief that there has been an
escape of assessment or under-assessment
or wrong assessment.

27. There are a catena of
judgments of this Court holding that
assessment proceedings can be reopened if
the audit objection points out the factual
information already available in the
records and that it was overlooked or not
taken into consideration. Similarly, if audit
points out some information or facts
available outside the record or any
arithmetical mistake, assessment can be
reopened.

32. The expression "information"
means instruction or knowledge derived from
an external source concerning facts or
parties or as to law relating to and/or after
bearing on the assessment. We are of the
clear view that on the basis of information
received and if the assessing officer is
satisfied that reasonable ground exists to
believe, then in that case the power of the
assessing authority extends to reopening of
assessment, if for any reason, the whole or
any part of the turnover of the business of the
dealer has escaped assessment or has been
under-assessed and the assessment in such a
case would be valid even if the materials, on
the basis of which the earlier assessing
authority passed the order and the successor
assessing authority proceeded, were same.
The question still is as to whether in the
present case, the assessing authority was
satisfied or not."

17. In the facts of the present case the
assessing
authority
has
received
534 INDIAN LAW REPORTS ALLAHABAD SERIES
information from DDIT (investigation),
Unit III, Nagpur from DGGI and GST
authorities as well as from CBDT that the
sellers of the assessee were availing
fraudulent ITC on the basis of investigation
made by the concerned agencies. Such
information would be information referable
to clause (i) of Explanation 1 to second
proviso to section 148 of the Act. We have
already observed that there is no challenge
to the notice by the assessee on the ground
that information disclosed vide notice
under section 148A(b) is not covered by the
information specified in Explanation 1 to
the second proviso to section 148 of the
Act of 1961.

18. Learned counsel for the petitioner
has placed reliance upon the judgment of
Supreme Court in Red Chilli International
Sales vs. Income Tax Officer, [2023] 146
taxmann.com 224 (SC), wherein the Court
held as under:-

"Delay condoned.

We with the petitioner that the
impugned judgment rejecting the writ petition
on the ground of alternative remedy does not
take into consideration several judgments of
this Court, on the jurisdiction of High Court,
as writ petitions have been entertained to be
examined
whether
the
jurisdiction
preconditions for issue of notice under Section
148 of the Income Tax Act, 1961 is satisfied.
The provisions of reopening under the Income
Tax Act, 1961 have undergone an amendment
by the Finance Act, 2021, and consequently
the matter would require a deeper and in-depth
consideration keeping in view the earlier case
law.
Accordingly,
we
set
aside
the
observations made by the High Court in the
impugned judgment observing that the writ
petition would not be maintainable in view of
the alternative remedy, clarify that this issue
would be examined in depth by the High
Court if and when it arise for consideration.
We do deem it open to examine this issue in
the present case after having examined the
notice under Section 148A (b) including the
annexure thereto, the reply filed by the
petitioner and the order under Section 148A
(d) of the Income Tax Act, 1961.

Recording the aforesaid, the special
leave petition is disposed of. We clarify that
the dismissal of the special leave petition
would not be construed as a findings or
observations on the merits on case."

19. On behalf of the department, Sri
Gaurav Mahajan has placed reliance upon a
Division Bench judgment of Punjab and
Haryana High Court in Anshul Jain vs. Pr.
CIT, [2022] 143 taxmann.com 37, wherein
the Court observed that no interference by
the writ court was warranted in the order
passed under section 148A(d) of the Act as
all the grounds of challenge to such order
would be available to an assessee while
challenging
the
order
passed
in
reassessment proceedings consequent to the
notice issued under section 148 of the Act,
1961.

20. The above order of Division
Bench of High Court of Punjab and
Haryana
was
challenged
before
the
Supreme Court of India in Anshul Jain vs.
Pr. CIT, [2022] 143 taxmann.com 38,
wherein the Court has observed as under:-

"What is challenged before the
High Court was the re-opening notice
under Section 148A(d) of the Income
Tax Act, 1961. The notices have been
issued, after considering the objections
raised by the petitioner. If the petitioner
has any grievance on merits thereafter,
the same has to be agitated before the
Assessing Officer in the re-assessment
proceedings.
6 All. Jagdish Prasad Gupta & Anr. Vs. Smt. Sudha Mehra & Anr.
535

Under the circumstances, the
High Court has rightly dismissed the writ
petition.

No interference of this Court is
called for.

The
present
Special
Leave
Petition stands dismissed."

21. So far as the judgment of Supreme
Court of India in Red Chilli International Sales
(supra) is concerned, the Court directed the High
Court to consider the reply filed by the petitioner
to the notice under section 148A(b) as well as the
order passed under section 148A(d) of the Act of
1961 as the High Court had refused to examine
the issue in view of the alternative remedy. This
direction by the Supreme Court of India is on the
facts of the case as the issues raised by the
petitioner before the High Court were not
examined. The Supreme Court did not endorse
the view that a writ petition itself would not be
maintainable against the order passed under
section 148A(d) of the Act, 1961 and
consequently directed the High Court to examine
the merits of order.

22. Maintainability of the writ petition
against the order passed under section 148A(d) is
distinct from the scope of adjudication available
qua the order passed under section 148A(d) of
the Act. The limited scope available under
Article 226 of the Constitution of India to
adjudicate an order passed under section
148A(d) of the Act, 1961 would be confined to
existence of the information only, in view of the
scheme of the Act of 1961. A contrary
construction cannot be culled out from the
judgment of the Supreme Court of India in Red
Chilli International Sales (supra).

23. In Anshul Jain (supra) the Supreme
Court did examine the scope of proceedings
under section 148A vis-a-vis reassessment
proceedings under section 148 of the Act to
observe that by the very nature of proceedings
the examination would remain more exhaustive
at the stage of reassessment proceedings with
elaborate remedies available under the statute to
the assessee.

24. The order passed by the Assessing
Officer under section 148A(d) of the Act
regarding existence of information suggesting
that income chargeable to tax has escaped
assessment would otherwise remain subject to
reassessment order passed under section 148 of
the Act. Thus, any observations of the assessing
authority while passing order under section
148A(d) with regard to merits of assessment of
income would remain subject to the order to be
ultimately passed in reassessment proceedings
under section 148 and would not be to the
prejudice of rights and contentions of the
assessee under section 148 as well as
departmental remedies in respect thereof.

25. In view of our deliberations and
discussions held above, we do not find any
merit in the challenge laid to the order of
assessing authority under section 148A(d) of
the Act, 1961, dated 29.03.2023, as well as
the notice issued under section 148 of the
Act, 1961. Subject to the observations
contained in this judgment the writ petition
accordingly fails and is dismissed.
----------
(2023) 6 ILRA 535
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 19.05.2023

BEFORE

THE HON'BLE NEERAJ TIWARI, J.

Matters Under Article 227 No. 4541 of 2023

Jagdish Prasad Gupta & Anr. ...Petitioners
Versus
Smt. Sudha Mehra & Anr. ...Respondents