Case Note & Summary
The petitioner, Shah Nanchandbhai Ranchhoddas Choksi, a partnership firm, challenged a notice dated 30.06.2025 issued under Section 148 of the Income-tax Act, 1961 and the order dated 30.06.2025 passed under Section 148A(3) of the Act. The dispute arose from a Tax Evasion Petition (TEP) alleging that the petitioner had purchased gold worth Rs.2,00,00,000 through black money for Assessment Year 2019-20. Pursuant to this information, the Income Tax Officer issued a show cause notice under Section 148A(1) on 23.03.2025. The petitioner filed a reply on 11.04.2025 denying all allegations and specifically requested the supply of documents, information, and statements referred to in the show cause notice. Instead of providing the requested documents, the respondent issued another notice on 23.05.2025, to which the petitioner replied on 30.05.2025. Thereafter, the respondent passed the impugned order under Section 148A(3) on 30.06.2025, holding that income chargeable to tax had escaped assessment, and issued a notice under Section 148. The petitioner challenged these actions before the Gujarat High Court under Article 226 of the Constitution. The core legal issue was whether the reassessment proceedings were vitiated due to violation of principles of natural justice, specifically the failure to supply documents relied upon in the show cause notice. The petitioner argued that the information from the TEP pertained to late Shri Nanchandbhai Ranchhoddas Choksi and had no bearing on the petitioner-firm, and that the non-supply of documents prevented them from making an effective representation. The respondent contended that the proceedings were valid. The court analyzed the provisions of Section 148A and emphasized that the Assessing Officer must provide a reasonable opportunity of being heard, which includes supplying the material relied upon. The court held that the failure to supply the documents requested by the petitioner constituted a violation of natural justice, rendering the reassessment order and notice invalid. Consequently, the court quashed the impugned order and notice, allowing the petition.
Headnote
A) Constitutional Law - Right to Fair Hearing - Natural Justice - Section 148A Income-tax Act, 1961 - Reassessment Proceedings - The Assessing Officer issued a show cause notice under Section 148A(1) based on information from a Tax Evasion Petition alleging purchase of gold through black money. The petitioner requested supply of relied-upon documents, but the officer failed to provide them and passed an order under Section 148A(3) without supplying the documents. Held that non-supply of documents relied upon in the show cause notice violates principles of natural justice and renders the reassessment order invalid (Paras 3-5).
Issue of Consideration
Whether the reassessment notice under Section 148 and the order under Section 148A(3) of the Income-tax Act, 1961 are valid when the Assessing Officer failed to supply the petitioner with the documents relied upon in the show cause notice, thereby violating principles of natural justice.
Final Decision
The court allowed the petition, quashing the impugned order dated 30.06.2025 passed under Section 148A(3) of the Income-tax Act, 1961 and the notice dated 30.06.2025 issued under Section 148 of the Act.
Law Points
- Natural justice
- Right to fair hearing
- Reassessment proceedings
- Section 148A Income-tax Act
- 1961
- Supply of documents
- Tax Evasion Petition
