Notice issued u/s 148A(b) with a questionnaire is treated as a notice of enquiry u/s 148A(a)

Case Details: Swal Ltd. v. Union of India - [2022] 141 taxmann.com 523 (Calcutta)

Judiciary and Counsel Details

• • T.S. Sivagnanam & Bivas Pattanayak, JJ.
  • Ranjeet Kumar Murarka Sr. Adv. Vivek Murarka & Dibanath Dey, Advs. for the Appellant.
  • Ms. Smita Das De, Adv. for the Respondent.

Facts of the Case

The Assessing Officer (AO) issued a notice under Clause (b) of Section 148A of the Income-tax Act (‘Act’) directing the assessee to show cause as to why, in view of the details contained in Annexure A of said notice, a notice of income escaping assessment should not be issued.

The assessee submitted their response to the notice and requested the AO to provide a verbatim copy of the information or documents based on which the notice had been issued.

AO didn’t respond to the request made by the assessee and served an order under Clause (d) of Section 148A along with a notice under Section 148.

High Court Held

In the Writ petition, the High Court observed that the notice though purported to have been issued by the AO under Clause (b) of Section 148A. But, on a reading of the Annexure, it was seen that the Annexure did not contain information but it was a questionnaire. This is so because several details have been called for from the assessee and they were requested to submit their explanation with clarification and necessary information. If such is the tenor of the notice, it pre-supposes that the AO was desirous of conducting an enquiry after receiving clarifications and information on the issues mentioned in the Annexure which should have been done through issuance of notice under Clause (a) of Section 148A instead of Clause (b) thereof.

Thus, the High Court held that there was a gross procedural error from the very inception of the proceedings rendering the same as bad in law.