In a recent ruling of the Delhi High Court, the division bench of Justices Manmohan and Manmeet Pritam Singh Arora, in a Writ Petition, quashed the proceedings of the department, the order passed and notice issued under Sections 148A(d) and 148A(b) of Income Tax Act, 1961 respectively on the distinct and separate grounds.
The writ petition was filed in challenging the two notices issued under Section 148 of Income Tax Act on different dates, another notice issued under Section 148A(b) of the act and an order passed under Section 148A(d) of the Income Tax Act for the A.Y. 2017-18.
Ved Jain with Nischay Kantoor, the Counsels on behalf of the petitioner (assessee) contended that the order passed and the notice issued under Sections 148A(d) and 148A(b) of the Income Tax Act respectively are on distinct and separate grounds.
While comparing both the notice and the order, there was a difference found in the address, sale consideration and the circle rate.
The counsels further stated that the impugned proceedings for the A.Y. 2017-18 are barred by the limitation in terms of Section 149(1)(b) of the Income Tax Act as the income alleged to have escaped the assessment is Rs.11,25,000/-, which is less than Rs. 50,00,000 despite the fact that in terms of said the section, proceedings can be initiated after expiry of three years from end of relevant assessment year only if it exceeds Rs. 50,00,000/-.
Zoheb Hossain asserted on behalf of the Respondent (revenue) that an error had occurred because the Income Tax Officer (ITO) had sent incomplete information to the Assessing Officer (AO) at the beginning.
Further, he pleaded before the bench to allow the AO to issue supplementary or amendatory notice under Section 148A(b) of the Income Tax Act incorporating the corrected details of the property.
The records also revealed that the information with the AO received from the ITO was with regard to violation of Section 269SS of the Income Tax Act and not with regard to non-declaration of long term capital gain, for which the notice had been issued. Consequently, the impugned show cause notice is contrary to the record.
In pursuance of the Section 269SS of the Income Tax Act, an individual may only transfer a specific sum via a bank draft, cheque, or electronic form through a bank or other mode. Thus according Section 269T of the Income Tax Act, Rs. 20,000 is the maximum amount that can be transferred in cash.
The Bench remarked that the assessee specifically replied to the allegation that was mentioned in the notice issued under Section 148A(b) of the Income Tax Act.
Furthermore, even when granting the order under Section 148A(d) of the Income Tax Act, the AO failed to acknowledge that he had issued the notice under Section 148A(b) of the Income Tax Act since he had included the wrong information.
The Bench set aside that the show cause notice issued and order passed under Sections 148A(b) and 148A(d) of the Income Tax Act.
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