A Division Bench of Justice Rajiv Shakdher and Justice Girish Kathpalia of Delhi High Court has set aside the order assessment order passed under Section 148A(d) of the Income Tax Act, 1961. Also, directed the assessing officer to re-adjudicate the matter.
The assessment order granted under Section 147 of the Income Tax Act, read with Section 144B, is the subject of the writ petition. In addition, the notice given under Section 148A(b) and the order made under Section 148A(d) of the Income Tax Act were both challenged.
The principal allegation against the petitioner is that he has failed to disclose the entire sale consideration concerning the subject properties.
In the notice issued under Section 148A(d) of the Income Tax Act, the enforcement department has shared a diary along with other documents related to the violation of Income Tax. During the in-depth analysis of the said page, it was seen that against each transaction of Rs. 70,50,000, a payment of Rs.1,21,50,000 has been mentioned as Kacha in said dairy. An amount of Rs.70,500 has been mentioned as Tax Deduction at Source (TDS).
Further, the AO in the notice stated that the full value of sale consideration was shown at Rs. 1,41,00,000 which is as per the registered deed of the property whereas the actual sale consideration of the property comes to Rs. 2,42,50,000.
Thus, AO observed that there is a shortfall of Rs.1,01,50,000 which needs to be added back to the actual sale consideration and the capital gain has been calculated accordingly. Also concluded that there is an escapement of income.
The bench observed that it is evident on reading the notice, along with the order, that the AO was of the view that there was a cash component in the sale of the subject properties effected by the petitioner.
The petitioner then asked for a reasonable accommodation to acquire information needed for the defence about the sale consideration. The Assessing Officer, however, disregarded it and went against the rules of natural justice.
The Assessing Officer failed to adequately hear the petitioner’s standpoint, according to the High Court. Thus, it was ordered that a new notice be issued under Section 148A(b) of the Income Tax Act. Additionally instructed the petitioner to submit the response within 4 weeks of receiving the notice.
Furthermore, the court directed to allow a personal hearing for the petitioner and pass necessary orders in accordance with the law.
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