S.148 Income Tax Act | Assessing Officer Not Required To Share Entire Record At Reassessment Notice Stage: Delhi High Court

The Delhi High Court has held that an Assessing Officer is not required to supply the entire material on record to an assessee at the stage of issuing a notice under Section 148A of the Income Tax Act ,1961 (re-assessment stage) observing that such a requirement would unnecessarily protract reassessment proceedings and enable assessees to manufacture defences.

A division bench of Justices Dinesh Mehta and Vinod Kumar observed,

“If it is held that every material has to be supplied to the assessee along with the notice under Section 148A(1) or Section 148A(b) (as applicable from time to time), it will result in protraction of the proceeding and giving assessee unwarranted opportunity to defend the transactions, which he had withheld while filing the return of income by way of getting the relevant material or defence manufactured.”

The Court made the observation while dismissing a writ petition challenging reassessment proceedings initiated through a notice issued under Section 148A(b) of the Act.

Petitioner argued that the Assessing Officer had failed to provide complete details or information relating to alleged bogus purchases and fictitious sales reflected in the reasons for reopening assessment. It was argued that without disclosure of the underlying material, the assessee could not effectively respond to the notice.

Opposing the petition, the Revenue contended that Section 148A only mandates the supply of “information suggesting escapement of income” and does not require the Assessing Officer to furnish the entire investigation material or evidence at the threshold stage.

Rejecting the petitioner's contention, the High Court drew a clear distinction between “information” and “material” under the statutory scheme. The Court held that “information” at the Section 148A stage means a concise narration of the inference drawn by the Assessing Officer from the material available on record, and not the supply of all underlying documents or evidence.

“Framers of law have carved out a clear distinction between the material available on record and the information to be supplied. We are, therefore, of the considered view that supply of information does not necessarily mean that copies of the entire material available on record have to be supplied to the petitioner or assessee along with notice under Section 148A(1) or 148A(b), as the case may be,” the Court said.

As such, the Court upheld the validity of the reassessment notice and dismissed the plea.

For Petitioner: Advocates Abhinav Sharma

For Respondent: Advocates Gaurav Gupta, Shivendra Singh, Yojit Pareek, Surya Jindal