HC: Notice Under 148A(b) Cannot Demand Information; Such Enquiry Falls Under 148A(a):

HC: Notice Under 148A(b) Cannot Demand Information; Such Enquiry Falls Under 148A(a) The petitioner challenged notices dated 23.03.2022 and 31.03.2022 issued under Sections 148 and 148A(b) of the Income Tax Act, along with the later order dated 31.03.2022 passed under Section 148A(d). The Assessing Officer (AO) sought details regarding cash purchase transactions with M/s Sangini Corporation and M/s Nandkishor Corporation for the financial year 2017-18, calling for ledgers and explanations of amounts totalling around Rs. 1.37 crore. Main Issue: Whether a notice issued under Section 148A(b) can lawfully require the assessee to furnish information for verification, effectively amounting to an enquiry under Section 148A(a). HC's Order: The Gujarat High Court set aside the notices and the consequential order, holding Section 148A(b) provides an opportunity of being heard after the AO has already conducted enquiry under Section 148A(a). A notice under Section 148A(b) cannot seek information or act as a questionnaire meant for conducting an enquiry. The AO’s act of asking for ledgers and transaction details shows that the notice was, in substance, an enquiry under Section 148A(a), not a show-cause notice under Section 148A(b). Therefore, the notice and the order under Section 148A(d) were procedurally defective and invalid from inception. These defects go to the root and warrant the entire proceedings being quashed. The Court held that the Revenue is free to re-initiate proceedings under law, consistent with statutory timelines. To Read Full Judgment, Download PDF Given Below