A division Bench of the Allahabad High Court upheld the order under Section 148(d) as legal on the ground that the creditworthiness of lender not proved by the petitioner.
The writ petition has been filed under Article 226 of the Constitution of India by the petitioner, Indus Technical Education Society praying for the reliefs to issue a writ, order or direction in the nature of certiorari quashing the notice under Section 148 of Income Tax Act and order u/s 148A(d), both even dated 29.3.2022 and the connected proceedings for reassessment of Income for Assessment Year 2018-19.
In the notice under Section 148A(d) of the Income Tax Act, 1961 (hereinafter referred to as the Act, 1961), the Assessing Officer has mentioned two grounds for re-opening of the case for the Assessment Year 2018-19. Firstly, unsecured loan of Rs. 28,53,439/ and, secondly, cash deposit of Rs. 1,61,000/ and Rs. 8,03,88,545/ in two bank accounts. The petitioner submitted reply. Along with the reply, the petitioner has submitted bank certificate of Bank of Baroda in respect of two savings bank accounts in question, which, prima facie, shows that sums of Rs. 8,03,90,545/- and Rs. 1,65,000/- were deposited by the students in cash towards fees through pre-printed fee deposit Pay-In-Slip.
Thus, prima facie, the petitioner had an explanation with respect to cash deposits in the aforesaid two savings bank accounts. However, so far as unsecured loan of Rs. 28,53,439/ is concerned, the petitioner could not submit any credible evidence along with its reply to establish credit worthiness of the lender i.e. M/s Arrow Netmart Pvt Ltd.
The Court observed that “therefore, prima facie, the Assessing Authority had some relevant material before him to assume jurisdiction for initiating re-assessment proceedings under Section 147/148 of the Act, 1961. Thus, since the Assessing Authority has some relevant material in his hands, therefore, the impugned order under Section 148A(d) of the Act, 1961 cannot be said to be without jurisdiction or illegal.”
The Court further added that “For the reasons afore-stated, the writ petition is dismissed leaving it open for the petitioner to participate in the proceedings pursuant to the impugned notice under Section 148 of the Act, 1961.”
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