29 Aug Divya Capital One (P) Ltd. v. ACIT (Delhi High Court)
(W.P.(C) 7406/2022 dated May 12, 2022)
S. 148A : Reassessment-Conducting inquiry, providing opportunity before issue of notice-Order passed without considering the replies of the assessee-Assessed income was Rs. 10,07,05,88,04,543) Rupees One lakh seven hundred and five crores eighty lakhs four thousand five hundred and forty -three only)-Information to suggest-arbitrary, cryptic and without application of mind-not considering the response of the Assessee-Mechanical approval-Order under section 148A(d) set aside to the stage of the show cause Notice. (S. 147, 148, 148A(b), 151 , Art. 226]
The assessee is in the business of Trading in derivatives. The order u/s 148A was passed assessment order was passed understanding the nature of the business and non application of mind by proposing to make addition of Rs. 10,07,05,88,04,543/-) Rupees One lakh seven hundred and five crores eighty lakhs four thousand five hundred and forty -three only. The assessee challenged the said order by filing writ petition. Allowing the petition the Court observed that whether it is “information to suggest” under amended law or “reason to believe” under erstwhile law the benchmark of “escapement of income chargeable to tax” still remains the primary condition to be satisfied before invoking powers under Section 147 of the Act. Merely because the Revenue-respondent classifies a fact already on record as “information” may vest it with the power to issue a notice of re-assessment under Section 148A(b) of the Act but would certainly not vest it with the power to issue a re-assessment notice under Section 148 of the Act post an order under Section 148A(d) of the Act.
As the Order was arbitrary, cryptic and without application of mind, and the Assessee was not given a fair chance of representation, the impugned order issued under Section 148A(d) of the Act and the notice issued under Section 148 of the Act are quashed and the matter is remanded back to the Assessing Officer for a fresh determination. (W.P.(C) 7406/2022 dated May 12, 2022)