Aten Capital Pvt. Ltd. v. ACIT (2022) 447 ITR 346 / 326 CTR 878/ 288 Taxman 570 / 214 DTR 149(Delhi)(HC)

S. 148A : Reassessment-Conducting inquiry, providing opportunity before issue of notice-Conducting an enquiry is mandatory-Failure to consider reply to show cause notice-Order and subsequent notice was quashed-Matter remanded. [S. 147, 148, 148A(b), 148A(c),148A(d), Art.226]

Allowing the petition the Court held that the Assessing Officer had violated the mandatory condition of section 148A(c) by not considering the reply of the assessee before passing the order under section 148A(d). Even if the reassessment was being done for verification in accordance with Explanation 1 to section 148 the Assessing Officer should have conducted an enquiry with respect to the information on a particular transaction in accordance with section 148A(a). The Assessing Officer ought to have scrutinised the contentions and submissions of the assessee before passing an order dated April 5, 2022 under section 148A(d). The acknowledgment of the reply dated April 4, 2022 received by the assessee from the e-filing portal of the Department showed that the assessee had filed a reply. Since the order under section 148A(d) had been passed on April 5, 2022, i. e., after receipt of the assessee’s detailed reply dated April 4, 2022 the Assessing Officer should have considered the reply since it was available on record. The order passed under section 148A(d) and the notice issued under section 148 were quashed and set aside. The matter was remanded back to the Assessing Officer to pass a reasoned order in accordance with law after considering the reply filed by the assessee. Matter remanded.