Question And Answer
Subject: Sec.148A(b) after order of SC
Querist: Manoj
Answered by:
Tags: , ,
Date: May 24, 2022
Query asked by Manoj

Assessee is proprietor engaged in the business as  Gas Agency under Bharat Gas. He has received notice U/sec. 148 for AY. 2013-14 and 2014-15 after 31.03.2021. Assessee filed the Return of Income for both the years and asked for reasons for reopening and copy of proposal  sent for approval before higher authorities and approval granted and also.documents as well as information in possession of AO. AO has provided the issues in reason that assessee has deposited huge cash in Bank account .  Assessee has once again  asked for verbatim copy of reasons , copy of proposal  sent for approval before higher authorities and approval granted and also.documents as well as information in possession of AO. However AO has not provided the same. Meanwhile AO has issued Notice u/Sec. 143(2) and asked certain information.

In response to said assessee has submitted that reopening is beyond period of limitation and submitted that considering the nature of business of distribution of LPG to retail customer , assessee has to accept the cash from  customer and provided entire bank statement along with explanation of each debit and credit entry in the bank statement alongwith audited financial statements. Assessee further submitted that cash Depsoits are out of sales proceeds and sales disclosed are more than cash Depsoits in bank. Therefore 148 proceeds based on huge cash deposit in banks is incorrect and with out considering the nature of business, thus with out  application of mind.

Now in view of decision of Hon’be  SC has given notice U/Sec. 148A(b) along with information about cash deposit in Bank account and asked to submit response with in two weeks .

Whether assessee can submit the reply which he has given earlier about explanation of cash Deposit in Bank. Can assessee raised issue of period of limitation ?


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Firstly, the concept of “recorded reasons” is no longer a part of the Income-tax Act, 1961. Therefore, asking for a copy of the recorded reasons won’t help.

The assessee should rely on the first proviso to section 149(1) of the Income-tax Act, 1961. However, there is a CBDT Instruction no. 1 of 2022, which has, inter alia, instructed Assessing Officers to Assessee AY 2013-14 onwards. Therefore, the assessee, based on the facts of their case, might have to challenge the Instruction being ultra vires the Parent Act before the Hon’ble High Court by filing a Writ Petition.

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