Delhi High Court Distinguishes 'Information' from 'Material' in Reassessment Proceedings: Upholds Section 148A Notice Despite Lack of Underlying Documents
In a significant judicial pronouncement concerning the reassessment regime under the Income Tax Act 1961, the Delhi High Court has clarified the statutory obligations of the Assessing Officer (AO) regarding the disclosure of information. The Court adjudicated a dispute involving the sufficiency of details provided in a notice issued under Section 148A(b), establishing a critical distinction between "information" suggesting income escapement and the actual "material" or evidence relied upon.
The judgment, delivered in the case of MHJ Metaltechs Pvt. Ltd. Vs ITO, addresses whether an assessee is entitled to receive all underlying evidentiary material at the preliminary stage of notice issuance.
Case Background and Factual Matrix
The controversy arose when the Revenue initiated reassessment proceedings against the assessee, MHJ Metaltechs Pvt. Ltd., alleging that significant financial transactions had escaped assessment.
The Impugned Notices
The proceedings commenced with a notice dated 20.03.2024, issued under Section 148A(b) of the Income Tax Act 1961. This was followed by a supplementary communication/notice dated 17.04.2025.
The Revenue's notice flagged two specific categories of alleged discrepancies:
- Bogus Purchases: Amounting to ₹46,00,460.
- Fictitious Sales: Amounting to ₹89,86,36,597.
The Assessee's Grievance
The assessee challenged the validity of these notices via a writ petition. The primary contention was that the information supplied by the AO was vague, inadequate, and lacked the specificity required to formulate a meaningful response.