Material Triggering Reassessment Must Be Furnished To The Assessee: Bombay High Court

The Bombay High Court has held that providing information to the assessee without furnishing the material based upon which the information is provided would render an assessee handicapped in submitting an effective reply to the show cause notice.

The bench of Justice Dhiraj Singh Thakur and Justice Valmiki Sa Menezes has observed that the reassessment proceedings initiated are unsustainable on the ground of violation of the procedure prescribed under Section 148A(b) on account of the failure of the assessing officer to provide the requisite material, which ought to have been supplied along with the information.

The petitioner/assessee filed his return as an individual for the assessment year 2018-19 under Section 139(1). The return was processed under Section 143(1).

A notice under Section 148A(b) was issued by the respondent suggesting that income liable to tax for the assessment year 2018-19 had escaped assessment and calling upon the petitioner to show cause as to why a notice under Section 148 was not issued.

The petitioner totally denied that there was any transaction with BGR Construction LLP and that no warehouse had been booked or payment made to the said entity. The petitioner also denied any ‘on-money cash transaction’ with the entity and therefore demanded that the proceedings initiated under Section 147 be dropped.

The department contended that there was no such obligation cast upon the revenue in terms of Section 148A(b) to provide to the assessee anything beyond providing him with the information.

The court, while quashing the reassessment, held that the requirement of Section 148A(b) envisages that not only information be provided to the petitioner but also the material relied upon by the department for purposes of making it possible to file a reply to the show cause notice.

Case Title: Anurag Gupta Versus ITO

Case No.: Writ Petition No.10184 Of 2022

Citation: 2023 LiveLaw (Bom) 221

Date: 13.03.2023

Counsel For Petitioner: Sham Walve, Abhishek Khandelwal

Counsel For Respondent: Ajeet Manwani, Samiksha Kanani

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