Case Law Details
Vinod Lalwani Vs Union of India (Chhattisgarh High Court)
Introduction: The case of Vinod Lalwani vs Union of India, heard in the Chhattisgarh High Court, revolves around challenges to an order dated 30.03.2023 under Section 148A(d) of the Income Tax Act, 1961. This article provides a comprehensive analysis of the court’s judgment, addressing key aspects, objections raised by the petitioner, and the implications of the decision.
Detailed Analysis:
1. Order and Objections: The petitioner challenges the letter/order dated 30.03.2023, citing non-supply of relevant documents during the enquiry. The Assessing Officer’s assertion that all documents were provided contrasts with the petitioner’s claim. The article delves into the objections raised by the petitioner, highlighting the discrepancy between the order’s content and subsequent communications from the department.
2. Principle of Natural Justice: The analysis emphasizes the non-compliance with the principle of natural justice in the enquiry process. The petitioner’s plea for an opportunity to cross-examine relevant statements and documents is discussed. The court finds flaws in the enquiry and non-supply of documents, raising concerns about procedural fairness and adherence to Section 148A of the Act.
3. Setting Aside the Order: Considering the flaws in the enquiry and the petitioner’s objections, the Chhattisgarh High Court sets aside the order under Section 148A(d) dated 30.03.2023. The matter is remitted back to the Assessing Officer with a directive to provide relevant documents, including the enquiry report, to the petitioner. The court’s decision reflects the importance of procedural correctness and adherence to statutory provisions.
4. Implications and Direction to Faceless Unit: The article explores the broader implications of the court’s decision and its impact on the petitioner. It discusses the court’s direction to inform the faceless unit about the order, underlining the significance of transparency and communication in tax proceedings.
Conclusion: In conclusion, the analysis of Vinod Lalwani vs Union of India sheds light on the intricacies of the case. The Chhattisgarh High Court’s decision to set aside the order and remit the matter back to the Assessing Officer underscores the court’s commitment to procedural fairness and adherence to legal principles. The article serves as a valuable resource for understanding the nuances of the judgment and its potential implications for future tax-related cases.
FULL TEXT OF THE JUDGMENT/ORDER OF CHHATTISGARH HIGH COURT
Heard.
1) The petitioner has challenged the letter/order dated 30.03.2023 passed under Section 148A(d) of the Income Tax Act, 1961 (for short, the Act, 1961) along with approval by the specified authority under Section 151 of the Act, 1961 and notice dated 31.03.2022 issued under Section 148 of the Act, 1961.
2) Learned counsel for the petitioner would submit that during the course of enquiry, the relevant documents were not supplied by the Assessing Officer to the petitioner/assessee despite repeated A prayer was made before the authorities concerned on 02.03.2023 along with a reply. He would further submit that in the order dated 30.03.2023; the Assessing Officer has stated that in response to the above, all the relevant documents which led to the reopening of the case have already been supplied on 17.02.2023. He would also submit that a letter has been issued by the department on 19.11.2023 where it is stated that notice under Section 148 A (b) of the Act, 1961 was issued to the assessee along with the documentary evidence relied upon on 17.02.2023 but due to the large file, only some part of the attachments of the notice was sent through the ITBA software. It was further stated in the letter that some relevant documents were sent on 18.02.2023 from the office through the post vide speed post no. EC284443085IN to the assessee. He would further contend that the stand taken by the Assessing Officer in the order dated 30.03.2023 is entirely different from the letter dated 19.10.2023 therefore, he would pray that the order passed by the department on 30.03.2023 may be set aside and the matter be remitted back to the authorities to pass an order afresh after providing entire relevant documents pertaining to the present matter.
3) On the other hand, learned counsel appearing for the respondents would submit that all the relevant documents were supplied to the petitioner and the petitioner submitted his response on 25.02.2023 but no stand was taken that relevant documents were not supplied to him. He would further submit that prior to the order dated 30.03.2023, a representation was made by the petitioner to provide relevant documents and in pursuance to that letter; the documents were supplied to the petitioner through ITBA software and postal service. He would also submit that after 30.03.2023 no objection was raised and after 6 months this petition has been filed. He would contend that the matter has already been sent to the faceless unit; therefore, the petition deserves to be dismissed.
4) I have heard learned counsel for the parties and perused the documents available on record.
5) In response to the notice dated 17.02.2023 issued under Section 148A(b) of the Act, 1961 the petitioner has raised an objection vide Annexure P/5. Para-3 of the objection is reproduced herein below:-
“3. The notice is issued by your goodself by mechanically relying on information provided by investigation wing and lacks independent enquiry and application of mind
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- The notice issued by your goodself is based on information received from investigating authority and further no proper independent enquiry has been conducted by your goodself’s office. In the present case your goodself has acted merely on borrowed satisfaction and has not applied independent mind to arrive at a conclusion that the information on hand suggest that income chargeable to tax has escaped assessment. Hence the impugned notice issued is liable to be set aside and dropped.
Notwithstanding to our aforementioned objections on issuance of notice we submit that all our transaction during the captioned assessment year are genuine and we further submit that the assessee is not aware of any transaction with Mr. Deepak Nanjyani, also the assessee has no dealings whatsoever with Shri Deepak Nanjyani as stated by your goodself in the letter dated 26.05.2022 and notice dated 17.02.2 023.
We object and dispute that the reasons recorded by your goodself are incorrect as the assessee has not transacted with Shri Deepak Nanjyani nor has dealt with him in any manner. Since, the reasons recorded are incorrect, we submit before your goodself that the assessee’s case is not fit for issue of notice under section 148 of the Act.
Opportunity for cross examination
The impugned notice issued by your is based on information received from investigating authority and further cheque book and statement of Shri Deepak Nanjyani. We have not been provided such statement and cheque book upon which your goodself has relied. Hence, we pray before your goodself to kindly provide us with the opportunity to cross examine the relevant statement and Shri Deepak Nanjyani before passing any order in this regard.”
6) From a perusal of the order dated 30.03.2023 passed under Section 148A (d) of the Act, 1961 and subsequent notice issued under Section 148, it is quite vivid that all the relevant documents upon which the Assessing Officer relied on for reopening of the proceedings were supplied to the petitioner but the letter dated 19.10.2023 reflects that due to large file only some part of attachments of the notice was sent through ITBM software and some documents through postal service on 18.02.2023. Further, in response dated 02.03.2023, the petitioner has specifically stated that the relevant documents have not been supplied and further in the last para, the petitioner has categorically stated that cheque book and statement of Shri Deepak Nanjyani have not been supplied.
7) Taking into consideration the flaws in the enquiry and non-supply of the relevant documents, this Court is of the opinion that the principle of natural justice has not been complied with in its full rigor and also the provisions of Section 148A of the Act, 1961 have not been followed by the revenue, therefore, the order passed by the Assessing Officer under Section 148 A (d) of the Act, 1961 on 30.03.2023 and notice issued under Section 148 of the Act, 1961 on 31.03.2023 are hereby set aside. The matter is remitted back to the Assessing Officer to pass an order afresh after providing relevant documents including the enquiry report dated 08.03.2021 to the petitioner.
8) With the aforesaid observation(s) and direction(s), the instant petition is hereby disposed of.
9) The petitioner is also directed to inform the faceless unit with regard to the passing of this order.
10) The letter dated 19.10.2023 is taken on record.
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