A Division Bench of the Delhi High Court quashed the order passed under Section 148A (b) of the Income Tax Act issued on failure to furnish a return of income, report or statement of financial transaction on failure to appreciate reply in response to the income tax notice issued under Section 148A(b) of the Income Tax Act.
By the writ petition filed under Article 226 of the Constitution of India, the petitioner, Upinder Kumar Wanchoo, has assailed notice issued under Section 148A(b) of the Income Tax Act, 1961. Besides this, challenge is also laid to the order passed under Section 148A(d) of the Income Tax Act. In addition, thereto, the petitioner has challenged the consequential notice issued under Section 148 of the Income Tax Act.
It is the petitioner’s case that he, along with two other persons, was a partner in a firm going by the name M/s Forde International. It is also the petitioner’s case that the firm was dissolved. The petitioner claims that the firm was converted into a proprietorship concern.
The principal grievance of the petitioner is that the Assessing Officer (AO) has failed to appreciate the reply submitted by the petitioner, in response to the notice issued under Section 148A(b) of the Income Tax Act, with regard to the facts adverted to therein.
Prashant Kanha, who appeared on behalf of the petitioner/assessee, submitted that, the penalty proceedings initiated against the petitioner were dropped in view of the explanation given by the petitioner and argues that these aspects have not been analysed in its correct perspective by the AO while passing the impugned order under Section 148A(d) of the Income Tax Act.
The Court of Justices Rajiv Shakdher and Girish Kathpalia observed that “In our view, the AO should revisit the issue, and in this regard, also offer a personal hearing to the petitioner and/or his authorised representative. Accordingly, the impugned order passed under Section 148A(d) of the Income Tax Act is set aside.”
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