# Sri Subodh Agarwal v. Principal Chief Commissioner of Income Tax, Kanpur & Ors

- **Citation:** (2023) 2 ILRA 1106
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2023-01-25
- **Case number:** Writ Tax No. 1290 of 2022
- **Bench:** Rajesh Bindal, C.J. J.J. Munir
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/sri-subodh-agarwal-v-principal-chief-commissioner-of-income-tax-kanpur-ors-49704
- **Pages:** 26

## Headnote

C.S.C.,
Sri
Gaurav
Mahajan
(Senior
Standing Counsel)

Civil Law - Income Tax Act, 1961-Section
148 A (b)-notice u/s 148 and order rejecting the
objection raised against the notice is impugnedprima facie availability of material is sufficient for
reopening of the re-assesment proceedings and
sufficiency and correctness of the material is not to
be considered at that stage.

W.P. dismissed. (E-9)

List of Cases cited:

## Text

_Characters 0–39,923 of 61,386. This is a partial read: ask again with offset=39923 for what follows._

1106 INDIAN LAW REPORTS ALLAHABAD SERIES
assessment orders passed against him.
What transpired at the time of hearing was
that at that stage, the department did not
prefer any appeal against the order passed
by the Commissioner of Income Tax
(Appeals) as the tax effect, after giving
benefit of the orders passed by the
Settlement Commission, was less than the
limit prescribed for filing and pursuing the
appeals before the Tribunal. As the orders
passed by the Settlement Commission have
been set aside, to do complete justice, we
grant liberty to the department to avail of
appropriate remedy against the order
passed by the Commissioner of Income Tax
(Appeals) dated January 17, 2019 in the 29
WRIT TAX No. 208 of 2017 appeal filed
by Dr. A.K. Sachan. If any such remedy is
availed of within a period of one month
from the date of receipt of copy of the
order, the same shall not be rejected only
on account of delay and shall be considered
on merits.

41. We also feel to observe that the
conditions as contained in the circular
issued by Central Board of Direct Taxes
regarding filing or pursing the appeals at
different levels may have to be revisited
and certain exceptions may have to be
carved out to take care of cases like the one
in hand.

42. It has also been brought on record
that Dr. A. K. Sachan is a Doctor working
as Professor in King Georges Medical
University, Lucknow. This fact has come
on record as well as in the report submitted
by the Commissioner of Income Tax. It is
surprising that a person working in a State
University is a Director of a private entity
and despite huge amounts of money have
been found in his personal account
including cash during search operations, no
action has been taken by his employer
which is a State entity. The conduct rules
pertaining to government servant and even
those employed in public corporation/
utilities are not permitted to indulge in
private practice unless there is specific rule
or provisions in this regard. This Court has
been informed that the Doctors of King
Georges Medical University are entitled to
non-practicing allowance and further that
there is bar from private practice which
clearly indicates that they cannot work
anywhere except for the University where
they are appointed.

43. This Court takes a very serious
view of the facts placed before it and it is
expected that the university concerned and
the State Government shall make due
inquiries
and
proceed
appropriately
against such individuals who are found
indulged in blatant private practice and
making profits in private companies and
also being on their Boards as Directors.
Let a copy of this 30 WRIT TAX No. 208
of 2017 judgment be forwarded to the
Principal Secretary, Medical Education,
Government
of
U.P
and
the
Vice
Chancellor of King George Medical
University,
Lucknow
by
the
Senior
Registrar of this Court for compliance.
----------
(2023) 2 ILRA 1106
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 25.01.2023

BEFORE

THE HON'BLE RAJESH BINDAL, C.J.
THE HON'BLE J.J. MUNIR, J.

Writ Tax No. 1290 of 2022

Sri Subodh Agarwal ...Petitioner
Versus
Principal Chief Commissioner of Income
Tax, Kanpur & Ors. ...Respondents
2 All. Sri Subodh Agarwal Vs. Principal Chief Commissioner of Income Tax, Kanpur & Ors.
1107
Counsel for the Petitioner:
Sri Dhruva Agrawal (Sr. Advocate), Sri
Shubham Agrawal, Sanyukta Singh

Counsel for the Respondents:
C.S.C.,
Sri
Gaurav
Mahajan
(Senior
Standing Counsel)

Civil Law - Income Tax Act, 1961-Section
148 A (b)-notice u/s 148 and order rejecting the
objection raised against the notice is impugnedprima facie availability of material is sufficient for
reopening of the re-assesment proceedings and
sufficiency and correctness of the material is not to
be considered at that stage.

W.P. dismissed. (E-9)

List of Cases cited:

1. Ram Ballabh Gupta Vs Assistant Commissioner
of Income Tax & ors., (2005) 199 CTR

2. Cargo Clearing Agency Vs Joint Commissioner
of Income Tax, (2008) 218 CTR

3. Commissioner of Income Tax Vs Kelvinator of
India Ltd, (2010) 228 CTR (SC) 488

4. Commissioner of Income Tax Vs Kelvinator of
India Ltd, (2017) 392 ITR 336

5. Principal Commissioner of Income Tax Vs
Meenakshi Overseas Pvt. Ltd, (2017) 395 ITR 677

6. CWP No. 10219 of 2022- Anshul Jain Vs
Principal Commissioner of Income Tax & anr.

7. GKN Driveshafts (India) Ltd. Vs Income Tax
Officer, 259 ITR 19 (SC)

8. Krishna Developers & Co. Vs Deputy
Commissioner
of
Income-tax,
(2017)
94
Taxmann.com 166 (Guj.)

9. CIT Vs Vishal Gupta, (2012) 22 tax mann.com
82/210 Taxman 65 (Mag) (Delhi)

10. Raymond Woollen Mills Ltd. Vs ITO & ors.,
(1999) 236 ITR 34 (SC)
11. Assistant Commissioner of Income Tax Vs
Rajesh Jhaveri Stock Brokers P. Ltd, (2007) 291
ITR 500 (SC)

12. TO Vs Selected Dalurband Coal Co. Pvt. Ltd.
(1996) 217 ITR 597 (SC)

13. Raymond Woollen Mills Ltd. Vs ITO (1999)
(236) ITR 34 (SC)

(Delivered by Hon'ble Rajesh Bindal, C.J.
&
Hon'ble J.J. Munir, J.)

1. The petitioner has approached this
Court praying for quashing of notice dated
March 28, 2022 (Annexure-13) issued
under Section 148A(b) of the Income Tax
Act, 1961 (for short ''the Act'), notice dated
April 24, 2022 (Annexure-15) issued under
Section 148 of the Act and order dated
April 24, 2022 passed by respondent no. 2
rejecting the objections raised by the
petitioner against issuance of notice under
Section 148A(b) of the Act. Further prayer
has been made for dropping the reassessment
proceedings
initiated
in
pursuance of notice under Section 148(1)
of the Act.

2. Mr. Dhruva Agrawal, learned
Senior Counsel appearing for the petitioner
submitted that search was carried out at the
premises of the petitioner on August 31,
2015. A show cause notice was issued on
June 1, 2016 under Section 153A of the Act
for block assessment. The order of
assessment was passed on December 31,
2017, which was challenged by the
petitioner as well as the Department before
the Income Tax Tribunal. The appeal filed
by the petitioner was accepted whereas the
one filed by the Department was dismissed.
The order was further challenged by the
Department by filing an appeal before this
1108 INDIAN LAW REPORTS ALLAHABAD SERIES
Court, which was dismissed vide order
dated December 12, 2022.

3. After passing of the order under
Section 153A of the Act, during pendency
of the appeal against the aforesaid order, a
show cause notice was issued to the
petitioner on March 28, 2022 under Section
148A(b) of the Act, which was duly replied
to by the petitioner. Rejecting the objection
raised by the petitioner, order was passed
on April 24, 2022 granting sanction for
initiation
of
proceedings
against
the
petitioner under Section 148A(d) of the Act
and consequently, a notice was also issued
on April 24, 2022. Initiation of proceedings
under Section 148 of the Act is subject
matter of challenge in the present writ
petition.

4. Referring to scheme of the Act, Mr.
Agrawal, learned Senior Counsel pointed
out that special procedure has been
prescribed in the Act for framing of
assessment/re-assessment in cases of search
and seizure. Chapter XIV-B was added.
Subsequently, Section 153A was added
with effect from June 1, 2003. Second
proviso to Section 153A provides that any
proceeding pending for assessment/reassessment for the relevant period on the
date of initiation of the search under
Section 132 or requisition under Section
132A shall abate. In the case in hand also,
after the assessment was framed under
Section 153A, as a consequence of search,
all pending proceedings abated. Section
149 of the Act was referred to, which
provides for limitation for issuance of
notice under Section 148 of the Act. As
assessment of the petitioner had already
been framed under Section 153A of the
Act, which is comprehensive and framed,
after taking approval from the higher
authorities, the assessment for the same
year cannot be reopened by issuing notice
under Section 148 of the Act. In support of
the arguments, reliance was placed upon
judgments of Madhya Pradesh High Court
in Ram Ballabh Gupta Vs. Assistant
Commissioner
of
Income
Tax
and
others1 and Gujarat High Court in Cargo
Clearing Agency vs. Joint Commissioner
of Income Tax2.

5. As far as merits of the controversy
and challenge to the order granting
permission for issuance of notice under
Section 148 of the Act are concerned, it
was submitted that the grounds mentioned
in the order granting approval for the show
cause notice is nothing else but change of
opinion. In support of the argument,
reliance was placed upon judgment of
Hon'ble
the
Supreme
Court
in
Commissioner
of
Income
Tax
vs.
Kelvinator of India Ltd3. At the time of
block assessment after search was carried
out all the issues and the material available,
were considered. In fact, the entire process
started after an audit objection, to which
reply was given by the assessee explaining
the reasons as to why the objection raised
by the audit was not tenable. There was no
fresh material available. Initiation of
proceedings under Section 148 of the Act
are bad on the ground of audit objection
only. In support of the arguments, reliance
was placed on judgments of Gujarat High
Court in Reckit Benckiser Healthcare
India Pvt. Ltd. vs. Deputy Commissioner
of Income Tax4 and Delhi High Court in
Principal Commissioner of Income Tax
vs. Meenakshi Overseas Pvt. Ltd.5

6. In response, learned counsel for the
Revenue submitted that in terms of the
amended provisions of Clause(ii) to second
proviso of Explanation 1 of Section 148 of
the Act specific mention has been made as
2 All. Sri Subodh Agarwal Vs. Principal Chief Commissioner of Income Tax, Kanpur & Ors.
1109
to what shall form information with the
Assessing Officer, which would suggest
that ''income chargeable to tax has escaped
assessment'. Audit objection has been
mentioned as one of them. The aforesaid
amendment was introduced with effect
from April 1, 2022. Prior to that, the
aforesaid proviso provided for objection
raised by the Comptroller and Auditor
General of India (hereinafter referred to as
''CAG'). In the case in hand as well, there
was an objection raised by the Audit
specifying that huge income had escaped
assessment as the text messages exchanged
by the petitioner with various parties have
not at all been considered while framing the
assessment. This has caused huge loss to
the revenue as the income chargeable to the
tax had escaped assessment.

7. The objection raised by the Auditor
was not treated as information prior to the
amendment of Section 148 with effect from
April 1, 2022.

8. It is merely a show cause notice to
the petitioner at this stage. His preliminary
objection against the same has already been
considered and rejected. During course of
assessment proceeding, the petitioner will
have fair opportunity to raise all objections,
in the proceedings initiated against him,
who has been able to defraud the revenue
to the tune of crores of rupees. These
proceedings should not be scuttled at the
very threshold. In terms of the second
proviso to Section 153A of the Act, only
pending proceeding abates. The section
does not talk about proceedings to be
initiated later on. The present case was not
a case of re-assessment under Section 153A
of the Act; rather it was assessment framed.
He further referred to judgment of Punjab
and Haryana High Court in CWP No.
10219 of 2022 titled as Anshul Jain Vs.
Principal Commissioner of Income Tax
and another decided on June 2, 2022, to
submit that merits of the controversy
cannot be gone into at this stage. Once the
competent authority had applied its mind
while granting approval for reopening of
the
assessment,
the
merits
of
the
controversy cannot be gone into. Special
Leave Petition filed against the aforesaid
order before Hon'ble the Supreme Court
also stands dismissed vide order dated
September 2, 2022.

9. Heard learned counsel for the
parties and perused the paper book.

SCHEME OF INCOME TAX
ACT FOR REASSESSMENT

10. Before we proceed to consider the
arguments raised by the parties, we deem it
appropriate to examine the scheme of the
Act for reassessment as the same has
undergone a change with effect from April
1, 2021.

Position prior to April 1, 2021

11. In terms of Section 147 of the Act,
existing prior to its amendment with effect
from April 1, 2021, an Assessing Officer
could initiate proceedings for reassessment
for reasons to believe that any income
chargeable to tax has escaped assessment.
Explanation 2 of Section 147 provides
certain instances which for the purpose of
section were admitted to be a case where
income chargeable to tax has escaped
assessment.

12. Section 148 of the Act as existing
upto that date required that before making
assessment, reassessment or recomputation
under Section 147, the Assessing Officer
1110 INDIAN LAW REPORTS ALLAHABAD SERIES
shall serve on the assessee a notice
requiring him to furnish his return. Section
148(2) provides that the Assessing Officer,
before issuing any notice under the section,
record his reasons for doing so.

13. As the law as stood at that time,
upon filing the return the assessee could
seek reasons for issuing such notice. After
receipt of reasons, the assessee was entitled
to question the initiation of reassessment
proceedings by filing objections before the
Assessing
Officer.
Before
proceeding
further, the Assessing Officer was required
to dispose of the objections raised by the
assessee, challenging his jurisdiction to
initiate reassessment proceeding. Any such
order passed could be challenged by
invoking writ jurisdiction of the Court.
Reference can be made to a judgment of
Hon'ble the Supreme Court in GKN
Driveshafts (India) Ltd. Vs. Income Tax
Officer6

14. The law interpreting the aforesaid
provision as existing at that time also
provided that the belief has to be that of a
prudent person having connection with the
material. Fishing and roving enquiry was
not possible nor a change of opinion.
Sufficiency of reasons could not be a
ground
to
challenge
initiation
of
reassessment proceedings.

15. Section 151 of the Act provides
for prior approval of the competent
authority before issuance of notice under
Section 148 of the Act.

Position after April 1, 2021

16. Substantial changes have been
made in the provisions providing for
reassessment with effect from April 1,
2021.

17. Section 147 of the Act, which
initially
provided
for
reopening
of
assessment ''for reasons to believe' was
amended. It now provides that if any
income chargeable to tax has escaped
assessment, the Assessing Officer may
assess
or
reassess
such
income
or
recompute the loss. The exercise of power
is subject to Sections 148 to 153 of the Act.

18. Before passing an order under
Section 147 of the Act, the Assessing
Officer is required to serve the assessee a
notice along with copy of the order passed
under clause (d) of Section 148A of the
Act, requiring him to file the return. First
proviso of Section 148 provides that no
notice under this Section shall be issued
unless there is information with the
Assessing Officer which suggests that
income chargeable to tax has escaped
assessment. The
prerequisite
is
only
availability of information, suggesting that
income has escaped assessment. Such an
exercise of power has to be with prior
approval of the specified authority.

19. In Explanation 1 to the aforesaid
Section, meaning of words ''information
with the Assessing Officer which suggests
that income chargeable to tax has escaped
assessment', has been defined. It includes
objection raised by the CAG to the effect
that assessment for the relevant assessment
year has not been made in accordance with
the provisions of the Act.

20. The aforesaid provision has
undergone a change vide Finance Act, 2022
with effect from April 1, 2022. Clause (ii)
of Explanation 1, now contain words ''any
audit objection' instead of the words ''any
final objection raised by the CAG'. The
condition is information in the form of
audit objection to the effect that assessment
2 All. Sri Subodh Agarwal Vs. Principal Chief Commissioner of Income Tax, Kanpur & Ors.
1111
has not been framed in accordance with the
provisions of the Act. The relevant clauses
are reproduced hereunder :

"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."

 (emphasis supplied)

21. Newly added Section 148A of the
Act provides that the Assessing Officer
before issuing notice under Section 148 of
the Act shall conduct enquiry, if required,
with prior approval of the specified
authority with respect to the information
which suggests that income chargeable to
tax has escaped assessment. Clause (b)
thereof provides that an opportunity of
hearing is to be afforded to the assessee to
show cause as to why notice under Section
148 of the Act be not issued on the basis of
information which suggests that income
chargeable to tax has escaped assessment.
Reply of the assessee, if any, is to be
considered and an order is required to be
passed in terms of Section 148(d) of the
Act. Second proviso to the aforesaid
Section provides eventualities in which the
scheme will not apply.

22. Newly added Section 148B of the
Act which was added with effect from
April 1, 2021 by Finance Act, 2021
provides that no order of assessment or
reassessment or recomputation shall be
passed by an Officer below the rank of
Joint Commissioner, to which Clauses (i) to
(iv) of Explanation 2 to Section 148 apply
except with prior approval of Additional
Commissioner or Additional Director or
Joint Commissioner or Joint Director.

DISCUSSIONS

23. In the case in hand, notices under
Section 148 of the Act has been issued on
the basis of an audit objection to the effect
that assessment has not been made in
accordance with the provisions of the Act.
This constitutes information which is
sufficient to initiate proceedings under
Sections 147 and 148 of the Act. After the
substantial amendments carried out in the
Act, it now provides that the proceedings
can be initiated in case where income
chargeable to tax has escaped assessment.
Proviso to Section 148 of the Act provides
that before issuing such notice, the
Assessing Officer should have information
which suggests that the income chargeable
to tax has escaped assessment. In terms of
Clause (ii) of Explanation 1, meaning has
been assigned to the term information
suggesting that income chargeable to tax
has escaped assessment to include even an
audit objection. In the case in hand as well,
notice under Section 148 of the Act has
been issued on the basis of an audit
objection giving complete details as to how
the income chargeable to tax has escaped
1112 INDIAN LAW REPORTS ALLAHABAD SERIES
assessment. Merely because in some of the
show cause notices issued to the petitioner
during
the
course
of
assessment
proceedings after search, a brief reference
was made to some information, which was
not finally dealt with, will not absolve or
will not come to the rescue of the assessee
to claim that the issue has already been
considered. It is for this reason that the
audit objection was raised.

24. For the sake of convenience,
Sections 147, 148 and 148A of the Act are
reproduced below :

"147. 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."

X X X X

"148.
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 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
2 All. Sri Subodh Agarwal Vs. Principal Chief Commissioner of Income Tax, Kanpur & Ors.
1113

(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 subsection(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 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 where 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
the specified authority referred to in section
151."

X X X X

"148A. 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 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:
1114 INDIAN LAW REPORTS ALLAHABAD SERIES

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.

(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 purposes of
this section, specified authority means the
specified authority referred to in section
151."

 (emphasis supplied)

25. In the present case, a perusal of
the notice shows that it was issued on the
basis of an audit objection. There were cash
transactions to the tune of ₹156,45,19,154/-
. During course of assessment, the source
and genuineness of the transaction was not
asked
for.
These,
having
remained
unexplained, were required to be treated as
income of assessee under Section 68 of the
Act. It may have tax effect to the tune of
₹64,34,53,872/-.
Details
of
the
cash
transactions were also annexed with the
reasons. It was on the basis of various
messages recovered from the mobile phone
of the petitioner, which was seized during
raid. In terms of aforesaid text messages,
the amount was to be delivered to different
persons on being identified by showing
currency notes bearing particular numbers.
The illegal activities of the petitioner were
found to be in the nature of providing
accommodation
entries
through
stage
managed sham sale and purchase of penny
stocks.

26. Aforesaid notice was replied to by
the petitioner vide his letter dated April 15,
2022 after seeking adjournments. The plea
raised was that all the texts and the
information which was available with the
Department was examined in detail at the
time of framing assessment under Section
153A of the Act, hence, there was no scope
for issuing any notice under Section 148 of
the Act. There was no fresh material
available.
Aforesaid
reply
was
supplemented by another reply vide letter
dated April 19, 2022. It was stated that after
the search the phone of the petitioner was
also seized and the messages were
extracted
therefrom.
The
chats
and
messages were thoroughly examined and
on the basis of same, additions were made
in the case of M/s Kanpur Organics Pvt.
Ltd., wherein a sum of ₹1,51,00,000/- was
surrendered. Also on the basis of the said
material, the assessments of other group
assessees were framed. The contents of the
information as such was not disputed by the
petitioner.
2 All. Sri Subodh Agarwal Vs. Principal Chief Commissioner of Income Tax, Kanpur & Ors.
1115

27. The details of the persons to
whom the cash has been delivered as per
the information extracted from the text
messages in the mobile of the petitioner,
which forms part of the notice are extracted
below:

Dat
e
Me
ssa
ge
fro
m
wh
om
rec
eiv
ed
Consent
Pally/specif
ying
message
Transac
tion
Am
ount
23.0
5.20
14
So
nu
Ka
np
ur

23
Aaye
hai a/c
mein
230
000
0
10.0
1.20
15

Ar
vin
d
Mi
ttal

UBI RKD
Chq.
No.033805

250
000
12.0
1.20
15

-
do-

Kamleshji

10mt
(Rs.Ten
Crores
using
Ten
Rs.note
No.63m
356014
for
hawala
transfer
)

100
000
000

12.0
1.20
15
-
do-
PK Singh

5mt
(Rs.5
crore
Ten Rs,
500
000
00

note
used for
transfer
of cash
52L995
010)

14.0
1.20
15

-
do-

Kapoorji

90
ka
RTGS

900
000
0

16.0
1.20
15

-
do-

Manish

45kg
(Rs.45
lacs
Delhi
Note of
Rs.
10
used
no.0931
008801
4

450
000
0

22.0
1.20
15

-
do-

Sunil
K.
Goel

(Scrip
code:53
8921
Scrip Id
L
RAFL)
128
600
0

07.0
2.20
15

-
do-

Vasundhara
Capital
&
Securities
Ltd.

130
000

14.0
2.20
15

-
do-

Rs.l
note no.
41L679
749
used for
75 KG
(Rs. 75
lacs
750
000
0

04.0
3.20
15

Sa
nja
y

HDFCR52
015030403
430793

(Tatwe
sh
Se
Na
Kahna
865
128
1116 INDIAN LAW REPORTS ALLAHABAD SERIES
ham ne
diya
hai.
That is
saying
by
Sanjay
a
person
of
Subodh
Agarwa
l,
Tatwes
h
is
brother
of
Sri
Sahswat
Agarwa
l
director
of Rich
Capital/
NikkiGl
oba1
being
largest
entry
provide
r)
19.0
8.20
15

De
epa
k
Bh
arti
ya

Directin
g to
Rajkum
arji
arrangin
g for a
note no.
for
hawala
transfer
of 10 kg
say for
Rs.10
lacs
100
000
0

16.0
-

Pl. give 500
6.20
15

do-

note for
5kgs
i.e.
transfer
of
hawala
for Rs.5
lacs
000

10.0
8.20
15
-
do-

Pl. give
note for
15 kgs
i.e
transfer
of
hawala
for Rs.
15 lacs
150
000
0

13.0
8.20
15
-
do-

Pl. give
note for
10
kg
i.e
transfer
of
hawala
for Rs.
10 lacs
100
000
0
28
08.2
015
Ar
vin
d
Mi
ttal
Arun
Kumar

130
000
0

-
do-
Vandana
Saini

500
000

-
do-

Arun
Kumar

500
000

-
do-

Arun
Kumar

130
000
0

-
do-

Vandana
Saini

500
000

03.0
-

27
kg 2.70
2 All. Sri Subodh Agarwal Vs. Principal Chief Commissioner of Income Tax, Kanpur & Ors.
1117
7.20
15

do-

i.e.
Rs.2700
000
Rs.10
note
no.29B
524554
000
0

30.6
.201
5

-
do-

Sneha
Kurele

145
000

28.0
6.20
15

-
do-

Jeetu
Bhai
Ko
25
Subhasj
i
ke
a/cmay
bol do

250
000
0

19.0
6.20
15

-
do-

10 Rs.
Note45
T i.e.
Rs.
45
crore
450
000
000

20.0
5.20
15

-
do-

Kolkata
Rajkumarji

Rs.2
note
no.04D
609437
for
40
kg
i.e.
transfer
of
hawala
fund of
Rs.
40
lacs
400
000
0

20.0
5.20
15
-
do-

Prasanta
Mondal,
Kolkata

Rs.
10
note
no.77m
690699
for
40
kg
i.e.
transfer
of
hawala
400
000
0

fund of
Rs.
40
lacs
25.0
5.20
15

-
do-

Yogesh
Delhi,
Noida

10
Ni
Note
no.24n0
32491
for
75
Kg i.e.
hawala
money
involve
d Rs. 75
lacs
750
000
0

-
do-

JK
Delhi,
Noida

Rs.2
note
no.62h8
17157
for
120kg
i.e.
hawala
money
Rs.l cr.
20 lacs.

120
000
00

01.0
6.20
15

-
do-

Premier
Alloys Ltd.

30Dec.
2014
Rs.17
lacs
2Jan.20
15
Rs.10
lacs
7Jan.20
15
Rs.15
lacs
420
000
0

11.0
5.20
15

-
do-
Kanhaiya
Lal
Agarwal

550
000
0

-
do-
Sapna
Kapoor

400
000
0
1118 INDIAN LAW REPORTS ALLAHABAD SERIES

-
do-
Sumit
Kapoor

500
000
0
07.0
5.20
15

-
do-

Neil refers
to
Neil
Industries
owned
by
Arvind
Mittal who
correspond
s
the
messages
to
Sri
Subodh
Agarwal
Neil Se
Abhishe
k ko 80
Ka
Paymen
t
diya
hai.

800
000
0

07.0
5.20
15

-
do-

Cash

190
247

23.0
4.20
15

-
do-

Neil
i.e.
Neil
Industries
owned
by
Arvind
Mittal

5000
Coding
stand to
Rs.
50
Crores

500
000
000

16.0
4.20
15

-
do-

Sunita
Maheshwar
i & Anand
Maheshwar
i

Total
fund
involve
d

279
319
94

-
do-

Kundan
Dealer Pvt.
Ltd,

250
000
0

-
do-

Prakash
Ko
Kanpur
me 200
dena
hai i.e.
decoded
Rupees

200
000
00

-
do-

Lala se
Delhi
Ka 150
Ka
number
le lena
i.e.
some
note no.
to
be
used for
hawala
fund

150
000
00

-
do-

'Give
the
token
for
Rs.250
200 OK
in
Luckno
w
250
Paid'
total
involve
ment
Rs. 2.50
crore

250
000
00

31.0
3.20
15

-
do-

Using
of
Rs.10
note
no.31c5
84165

04.0
4.20
15

-
do-

Qnt. Of
Dev
Shankar
Pandey
Sulabh
Shares:
37500
Shares
@91
2 All. Sri Subodh Agarwal Vs. Principal Chief Commissioner of Income Tax, Kanpur & Ors.
1119

27.0
3.20
15

-
do-

Send
10500
from
Abhishe
k
Agarwa
l

25.0
3.20
15

-
do-

Brahmavart
a
Infraheight
s Pvt Ltd.
Transfe
r
hawala
fund 45
KG i.e.
Rs.45
lacs
450
000
0

25.0
3.20
15

Brahmavart
a
Infraheight
s Pvt
Ltd. RTGS
for 20 KG
i.e.
Rs.20 Lacs
Transfe
r
Hawala
fund of
Rs.20
lacs
200
000
0

26.0
3.20
15
-
do-

Gyandeep
Khemka &
Co.
(Vikash
Agarwal,
Vikash
Agarwal,
HUF
&
Renuka
Agarwal)

479
325
0

27.0
3.20
15

-
do-

Abhishek
Agarwal

Send
10500
i.e.
Rs.10,5
0,000/-
Decodi
ng
105
000
0

28.0
3.20
15

-
do-

Hariom
HDFCR52
015032861
3((4330
FOR
4330
STAND
DECO
DED
AS
433
000
0

2294784.84
)
43.30
LACS
26.0
3.20
15

-
do-

Gyandeep
Khemka &
Co,
A/c
No.005403
40004413

479
325
0

25.0
3.20
15

-
do-

RTGS
managed
Brahmavart
a
Infraheight
s P Ltd. A/c
No.328865
35860
45 Kg.
i.e
Hawala
Money
involve
d
Rs.45
lacs
450
000
0

-
do-

RTGS
managed
Brahmavart
a
Infraheight
s P Ltd. A/c
No.337391
93894
45 Kg,
i.e
Hawala
Money
involve
d Rs.45
lacs
450
000
0

-
do-

RTGS
managed
Brahmavart
a
Infraheight
s P Ltd. Aic
No.337391
93894

20 Kg.
i.e
Hawala
Money
involve
d Rs.20
lacs

200
000
0

21/0
3/20
15
-
do-
RTGS
managed
for 55Lacs
and
4468702.22

550
000
0
446
870
2

-
do-

Prashant
Mondal

Rs.
1
Note
no.24E
866968
Kg.25
i.e.
250
000
0
1120 INDIAN LAW REPORTS ALLAHABAD SERIES
Hawala
Money
Rs.25L
acs
22/0
3/20
15
-
do.

Suraj

2
Rs.
Note
no.67A
333658
for 50K
. i.e. Rs.
50Lacs
500
000
0

21/0
3/20
15

-
do-

Escort
Wincom
Pvt. Ltd.

45Kg.
i.e.
45Lacs

450
000
0

20/0
3/20
15

-
do-

Sunil
Kapoor

45Kg.
from
salvatio
n
to
Sunil
Kapoor
450
000
0

19/0
3/20
15

-
do-

200
Lala
and 100
Five
Roses

19/0
3/20
15

-
do-

Prashant
Mondal

Rs.2
note
no.63S0
60829
for 50

500
000
0

18/0
3/20
15

-
do-

Prashant
Mondal

'300000
' Share
Modi
ka Alok
de raha
hai
RTGS
manage
d for
50
in
Amar
Jyoti by
Prashan
500
000
0

t
Mondal
20/0
3/20
15

-
do-

Gagandeep
Constructio
n Co.
Pvt. Ltd.

Rs.155
i.e.
155000
0

155
000
0

18/0
3/20
15

-
do-

Suraj

Rs.10
note
no.18S
066136f
or
50Kg.
i.e. Rs.
50 Lacs
500
000
0

-
do-

Suraj

Rss 10
note
no.53p9
74097
for
50Kg.
i.e. Rs.
50Lacs
500
000
0

17/0
3/20
15

-
do-

Prashant
Mondal

Rs.50
note
no.8AH
386946
for
50kg.
i.e.
50
Lacs

500
000
0

12/0
3/20
15

-
do-

Jai Sharma

RTGs
manage
d 40 ka

400
000
0

-
do-

Kothari

50000
share ka
matter

-
do-

Gabajee

For 10
kg note
of
Rs.10
no.
600
000
0
2 All. Sri Subodh Agarwal Vs. Principal Chief Commissioner of Income Tax, Kanpur & Ors.
1121
60k487
337
11/0
3/20
15

-
do-

Deoraji

For 15
Note of
Rs.10
no.23a1
37127

150
000
0

03/0
3/20
15

-
do-

Deendayalj
i

Rs.15
Note of
Rs.5 no.
40c799
140

150
000
0

24/0
2/20
15

-
do-

Ocean
Advisory P
Ltd.

By
Pawan
Kumar
Kurele

160
000
0

-
do-

Prasanta
Mondal

Rs.l
note
no.78r4
93629
for
25
kg

250
000
0

-
do-

Prasanta
Mondal

Rs.50
ka note
no.5d15
56919
for
25
kg
250
000
0

14/0
2/20
15

-
do-

Escort
vincom
P
Ltd,
to
shubhang
export
75 kg( 1
Lac
mein
final
kiya i.e.
his
commis
sion)
Note of
Rs.l
used
no.41L
679749
750
000
0

for this
75 kg to
Prasant
a
mondal
07/0
2/20
15

-
do-

Escort
vincom P.
Ltd.
To
Brahmavart
a
Infraheight
s

25kg

250
000
0

Extracts/analysis of messages derived
from Mobile I phone of Subodh Agarwal
documentised as Document-2

Date
Messa
ge
from
whom
receive
d
Consent
Party/sp
ecifying
message
Trans
actio
n
Am
ount
21/0
7/20
15
Rajiv
Agnih
otri

Rs.5
Note no.
18K941
426
For
Pintu
5.50+91,
and
Rs.5
note
no.82D3
63143
Chintu
for 7
13.41
Lacs

134
100
0

23/0
7/20
15

Babua
K K

60 O.K.

60
Lacs

600
000
0

24/0
7/20
15
Niel
Industr
ies
RTGS
made
Rs.
10
Las

100
000
0
1122 INDIAN LAW REPORTS ALLAHABAD SERIES

10Lacs
from
Sunil K
Gupta

23/0
7/20
15

Intuitio
n
Infrans
tructur
e p.
Ltd.
Rss
5Lacs
debited

5Lac
s

500
000

20/7/
2015

N.
Kurele
9999@
Yahoo.
com
7.75+1
.25=9
O.K. ho
gaya
1
Balance

10
Lacs

100
000
0

11/0
8/20
15
91995
61111
11
60 Lacs
withdra
wn
for
Niel Ind.
60
Lacs
600
000
0
12/0
8/20
15

94350
29042

Rambab
u

3
Lacs

300
000

13/0
8/20
15
Kaka 1
3
Lacs
cash
3
Lacs
300
000
24/0
8/20
15
Sanjay
ji Hyd
For
7
Box
7
Lacs
700
000
25/0
8/20
15

Lala

Recd.
350Cheq
&
Old
account
Che 91.3

4 Cr
41
Lacs
30Th

441
300
00

24/0
7/20
15

Subhas
h
Ghosh

A/c
no.3764
1089
Credited
Rs.
40
Lacs
through
RTGS
60
Lacs

600
000
0

Rodic;
and this
a/c
debited
bv
60
Lacs
30/07/20
15
to
Sanjeeva
ni Fer.
08/0
8/20
15

VM
FROM
SC

A/c
no.623x
xxx8673
credited
Rs.
50
Lacs on
20/08/20
15
and
debited
Rs.
20
Lacs on
26/08/20
15
and
Rs. 10
Lacs
debited
on
28/08/20
15
50
Lacs

500
000
0

26/0
8/20
15

S Baj

Suresh
Kumar
Rs.
102240
Manish
Goel
HUF
110160
Anuj K
Singh
195300
Richa
Singh
195600
6033
00

603
300

20/0
8/20
Arvind

Rs
5
Note no,
5
Lacs
500
000
2 All. Sri Subodh Agarwal Vs. Principal Chief Commissioner of Income Tax, Kanpur & Ors.
1123
15

J5B7790
15

28/0/
2015

-do-

Arun
Kumar,
New
Delhi
Vandana
Saini
Arun
Kumar
HUF
Sanjay
Kumar
(Accoun
t
managed
no,
9130100
5320345
8 Axis
Bank,
Delhi)
80
Lacs
30
Laos
30
Lacs
25
Lacs
165
000
00

20/0
7/20
15

R.K.
(Raj
Kumar
Ji)

Chintu Ji
Rs.
6Lacs
Rs.5
Note
no.82D3
63143
6Lac
s

600
000

21/0
7/20
15

R.
K.
(Raj
Kumar
Ji)

5.5 Lacs
Rs.
5
Note
no.
18K941
426
5.5
Lacs

550
000

27/0
7/20
15

-do-

Deepank
ar
Maurya
deposit
of
Rs.
25000 in
A/c no.
SBI
3297013
25K

250
00

8120
28/0
8/20
15

-do-

Deposit
of
rs.10000
in
SBI
a/c
no.
1128863
0578
10K

100
00

Extracts/analysis of messages derived
from Mobile I phone of Subodh Agarwal
documentised as Document-2:

Date
Messa
ge
from
whom
receive
d
Consent
Party/sp
ecifying
messag
e
Tran
sacti
on

Am
ount

25/05/
2015

N
Kurele