Facts of the Case

The petitioner, Umesh Chandra Sharma, an individual assessee, filed a writ petition challenging a notice dated 06.03.2023 issued under Section 148A(b), an order dated 21.03.2023 passed under Section 148A(d), and a consequential notice dated 21.03.2023 issued under Section 148 of the Income-tax Act for Assessment Year 2016-17.

The petitioner was allotted Importer Exporter Code (IEC) No. 0589013629 on 01.04.1989 linked to PAN AREPS2819J and had been regularly filing returns under the said PAN. The return for AY 2016-17 was filed on 23.03.2017 declaring total income of ₹5,17,990.

Reassessment proceedings were initiated on the basis of information available on the Insight Portal alleging high value export transactions amounting to ₹1,19,95,668. The notice under Section 148A(b) was, however, issued under a different PAN, namely PAN AABPS3614F. The petitioner contended that he had not used the said PAN since 2011 and that all exports were made under the IEC linked to PAN AREPS2819J.

The petitioner explained that the actual export turnover for the relevant year was ₹63,11,609.70 and not ₹1,19,95,668, and that the higher figure arose due to a clerical error in a shipping bill dated 08.10.2015, which was subsequently corrected by the Customs authorities. Despite furnishing documents including IEC certificate, GST registration and corrected records, the Assessing Officer proceeded to pass an order under Section 148A(d) holding it to be a fit case for reassessment.

Issues Involved

Whether reassessment proceedings under Sections 148A and 148 could be sustained when initiated on the basis of disputed and unverified shipping bill data allegedly linked to an incorrect PAN, and whether the Assessing Officer had adequately examined the material before forming an opinion that income had escaped assessment.

Petitioner’s Arguments

The petitioner argued that the reassessment proceedings were initiated on the basis of incorrect and non-existent information. It was submitted that the alleged export figure of ₹1,19,95,668 had been officially corrected and no longer existed in Customs records, and that all export income had already been duly disclosed under the correct PAN. It was further contended that the Assessing Officer failed to verify the shipping bill or examine the petitioner’s explanation before passing the order under Section 148A(d).

Respondent’s Arguments

The Revenue contended that the database of the Central Board of Indirect Taxes and Customs reflected exports linked to PAN AABPS3614F and therefore the Assessing Officer was justified in initiating reassessment proceedings. It was argued that the existence of two PANs created confusion and warranted further examination.

Court Order / Findings

The Delhi High Court observed that the core issue was whether the petitioner had in fact made exports under a shipping bill linked to PAN AABPS3614F and whether such exports had escaped assessment. The Court noted that the petitioner had categorically disputed the existence of any such exports and had asserted that the shipping bill relied upon by the Assessing Officer had been corrected.

The Court found that the Assessing Officer had proceeded on assumptions without examining the shipping bill or addressing the petitioner’s explanation in the order passed under Section 148A(d). The Court held that before proceeding further, the Assessing Officer must have some cogent material to support the belief that income had escaped assessment.

Accordingly, the Court set aside the impugned order passed under Section 148A(d) and remanded the matter to the Assessing Officer for fresh consideration after examining the relevant material.

Important Clarification

The High Court clarified that reassessment proceedings cannot be sustained merely on the basis of unverified portal data or assumptions arising from PAN-related discrepancies. The Assessing Officer must examine and verify the underlying material, especially where the assessee disputes the factual basis of the information relied upon.

Final Outcome

The writ petition was disposed of. The order dated 21.03.2023 passed under Section 148A(d) was set aside, and the matter was remanded to the Assessing Officer to pass a fresh order under Section 148A(d) after examining the relevant shipping bill and material, within a period of four weeks. All rights and contentions of the parties were left open.

Link to download order https://www.mytaxexpert.co.in/uploads/1769757481_UMESHCHANDRASHARMAVsTHEINCOMETAXOFFICERWARD471DELHIORS..pdf 

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