Case Law Details
Abdul Majeed Vs ITO (Rajasthan High Court)
High Court held that while passing an order under Section 148A of the Act, the authority is required to reach satisfaction to not only that income chargeable to tax has escaped assessment, but in case where three years have elapsed from the end of the relevant assessment year, the order under Section 148A of the Act for issuance of notice under Section 148 of the Act could be passed if there were no statutory impediment as contained in Section 149 Sub-section (1) (b) of the Act, referred to hereinabove.
The authority, as is apparent, sought to bridge this statutory impediment not on the basis of any material available on record but only with the help of a surmise that the assessee may have some more accounts. Even before this Court, when the reply has been filed by the respondent, no material has been placed to show that at the time when the authority passed order under Section 148A of the Act, there was some material on record that the income chargeable to tax which escaped assessment amount to or is likely to amount Rs.50,00,000/- or more for that year.
On conjoint reading of the provisions contained in Section 148A of the Act and what has been provided under Section 149 of the Act, it is vividly clear that in order to initiate proceedings under Section 148A of the Act, it is not enough that in case where notice is proposed to be issued under Section 148 of the Act after three years have elapsed from the end of the relevant assessment year that there should exist material available on record to reach to conclusion that some income chargeable to tax has escaped assessment, but the amount should be more than Rs.50,00,000/-. Only on the basis that the cash deposits of Rs. 19,39,000/-chargeable to tax have escaped assessment, without anything more, the authority was not justified in jumping to the conclusion that the assessee may have more bank accounts. If such an interpretation is placed on the provision of Section 148A (d) of the Act with reference to expression ‘material available on record’, then in that case, it will open flood gate and even without availability of any material, the authority would be initiating proceedings under Section 148 of the Act, which will completely frustrate the object of incorporation of Section 148A in the Act. It is well settled principle of interpretation that the taxing statute is required to be construed strictly. The interpretation as has been suggested by the learned counsel for the revenue cannot be placed upon the expression ‘material available on record’ to include possibility of collection of any relevant or tangible material for opening of proceedings under Section 148A of the Act.
Learned counsel for the revenue has placed reliance upon the decision of the Delhi High Court in the case of Gulmuhar Silk Pvt. Ltd. Versus Income Tax Officer Ward 10 (3), W.P.(C) 5787/2022 and CM Appl. 1729/2022, decided on 07.04.2022. The decision in the said case does not apply in the facts and circumstances of the present case. It is not a case where the assessee is disputing the factual aspects with regard to transactions. Present is a case where the respondent has failed to place before the Court any material to suggest that the income exceeding Rs.50,00,000/- chargeable to tax has escaped assessment, which would warrant issuance of order under Section 148A (d) of the Act followed by issuance of notice under Section 148 of the Act.
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