MAHANANDA ENTERPRISE LIMITED vs. INCOME TAX OFFICER, WARD 1(1)(3)

C/SCA/8208/2022 ORDER DATED: 02/05/2022 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 8208 of 2022 ========================================================== MAHANANDA ENTERPRISE LIMITED Versus INCOME TAX OFFICER, WARD 1(1)(3) ========================================================== Appearance: MR MANISH J SHAH(1320) for the Petitioner(s) No. 1 MS KALPANA RAVAL, ADVOCATE for the Respondent DS AFF.NOT FILED (N) for the Respondent(s) No. 1 ========================================================== CORAM:HONOURABLE MR. JUSTICE J.B.PARDIWALA and HONOURABLE MS. JUSTICE NISHA M. THAKORE

Date : 02/05/2022

ORAL ORDER (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA) 1 By this writ application under Article 226 of the Constitution of India, the writ applicant has prayed for the following reliefs: “A) This Hon’ble Court be pleased to call for the records of the proceedings, look into them and be pleased to issue a writ of certiorari or any other appropriate writ, order or direction quashing of the impugned order passed u/s. 148A(d) dated 31.03.2022 at Annexure-D and notice issued u/s. 148 dated 31.03.2022 at Annexure-E. B) This Hon’ble Court be pleased to issue a writ of mandamus or any other appropriate writ, order or direction asking the respondent not to proceed further in pursuance of Section 148 notice at Annexure-E. C) Pending the hearing and final disposal of this application, this Hon’ble Court be pleased to stay any further proceedings in pursuance of Section 148 notice at Annexure-E. D) This Hon’ble Court be pleased to grant any further or other relief as this Hon’ble Court deems just and proper in the interest of justice, and E) This Hon’ble Court be pleased to allow this application with costs Page 1 of 4

C/SCA/8208/2022 ORDER DATED: 02/05/2022 against the respondent.” 2 We have heard Mr. Manish J. Shah, the learned counsel appearing for the writ applicant and Ms. Kalpana Raval, the learned Senior Standing Counsel appearing for the Revenue. 3 On 26th April 2022, this Court passed the following order: “1. Draft amendment is allowed. The necessary incorporation shall be carried out at the earliest. 2. We have heard Mr. Manish Shah, the learned counsel appearing for the writ-applicant [assessee] and Mrs. Kalpana Raval, the learned senior standing counsel appearing for the revenue. 3. The subject matter of challenge in the present writ-application is the order passed under Section-148A(d) of the Income Tax Act, 1961 [for short ‘The Act, 1961’] dated 31.03.2022. The Assessing Officer is seeking to reopen the assessment for the A.Y. 2018-19. The notice issued under Sub-section-(b) of Section-148A is essentially on the ground that the Assessing Officer is in receipt of an information that the assessee i.e.the writ-applicant is a beneficiary to an amount of Rs.25 Lakh received through the Canara Bank Account No.344201700206 from one Subham Sales Pvt. Ltd., managed and operated by Mukesh Banka. Who is Mukesh Banka? 4. According to the Assessing Officer, a search and seizure action in the case of Banka Group was conducted on 21.05.2018. The incriminating materials collected during the search and survey action revealed that Mukesh Banka was managing paper/shell companies and was known for providing accommodation entries in the nature of bogus unsecured loans or in other forms. 5. Prima-facie, it appears that Subham Sales Pvt. Ltd. is also one of the shell companies controlled and managed by Mukesh Banka. In response to the notice issued under Clause-(b) of Section-148A, the writ- applicant filed its reply outright denying any such transaction with Subham Sales Pvt. Ltd. The reply was considered and while passing the order under Sub-section-(d) of Section-148A, the Assessing Officer reiterated in so-many words that he is in receipt of a specific information that the writ-applicant is a beneficiary of an amount of Rs.25 Lakh from Canara Bank Account No.344201700206 from Subham Sales Pvt. Ltd. managed and operated by Mr. Mukesh Banka. Page 2 of 4

C/SCA/8208/2022 ORDER DATED: 02/05/2022 6. The fine argument canvassed by Mr. Shah is that the Assessing Officer might be in receipt of such information, however, it is not necessary that such information is always true. The information that might have been received by the Assessing Officer, may be even false and incorrect. Mr. Shah would submit that once the assessee makes himself clear that the information received is incorrect and the transaction, which has been shown infact does not exist on record, then the Assessing Officer in accordance with the new procedure under Section-148A is obliged to substantiate his case by adducing further materials to the assessee and only thereafter proceed to issue the notice under Section-148A of the Act. 7. To appreciate this fine argument of Mr. Shah the first thing we should do is to request Mr. Raval to call for the record and show to us what is the exact information. 8. Perhaps even this may not suffice. When the Assessing Officer is so clear about the bank account number maintained with Canara Bank and is also so sure about the exact amount, it is easy from the record to verify whether there is any such transaction in the bank account of the assessee with respect to Subham Sales Pvt. Ltd. for the amount of Rs.25 Lakh. If this much is pointed to us that should be the end of the matter. 9. So far as the argument of Mr. Shah as regards the new procedure, which is now to be adopted is concerned, will be appreciated in light of the material that Mr. Raval may show to us. 10. Issue Notice to the respondent, returnable on 28.04.2022. We request Mr. Raval to act little promptly and call for the necessary details. Notify this matter on top of the board. One set of the entire paper-book shall be furnished to Mrs. Kalpana Raval at the earliest. 11. It goes without saying that any information must be substantiated on the basis of the record available. If any information is not substantiated with anything on paper, then perhaps the Assessing Officer may not be justified in just randomly issuing such notice. Therefore, tomorrow if the Assessing Officer is not able to substantiate the information on the basis of any record in writing in the form of a bank statement itself, then we may make appropriate observation as to how the Assessing Officer is expected to proceed in accordance with law. Direct service permitted.” Page 3 of 4

C/SCA/8208/2022 ORDER DATED: 02/05/2022 4 Today, when the matter was taken up for further hearing, Ms. Raval, the learned Senior Standing Counsel appearing for the Revenue pointed out that the verification of the original records revealed that the alleged transaction had occurred in a different assessment year and not relevant the assessment year for which the notice under Section 148A has been issued. 5 In view of the aforesaid, the impugned notice issued by the Assessing Officer deserves to be quashed and set aside. The same is, accordingly, quashed and set aside. If the Revenue wants to reopen the assessment for any other relevant assessment year and if permissible in law, it may do so in accordance with law. 6 With the aforesaid, this writ application stands disposed of. (J. B. PARDIWALA, J) (NISHA M. THAKORE,J) CHANDRESH Page 4 of 4