The Delhi High Court in a recent case quashed the income tax notice as the department failed to note the disclosure made in the Income Tax Return (ITR) prior to the issuance of Income Tx notice under section 148A(b) of the Income Tax Act,1961.
Ms. Shalini Mittal, the petitioner sought for the quashing of the Impugned Order dated 08.04.2022 passed by the Respondent under section 148A( d) of the Income Tax Act, 1961 and the Impugned Final Notice dated 08.04.2022 issued by the Respondent under section 148 of the Income Tax Act, 1961.
The petitioner stated that though the petitioner is a permanent resident of Gurugram, Haryana, yet the impugned notices and orders have been issued by the Assessing Officer, Ward 72(1), Delhi who is not the Jurisdictional Assessing Officer of the Petitioner.
It was argued that the transactions on the basis of which the reassessment proceedings are sought to be initiated against the Petitioner have already been declared by the Petitioner in her return of income for the Financial Year. Further stated that the proceedings had been initiated on the ground that the Petitioner has not filed her bank statements which he points out that the Petitioner had never been called upon to submit.
It was pointed out that the impugned order has been issued on entirely different grounds than those alleged by the Respondent in the show cause notice, as the show cause notice sought to tax Rs.2,43,87,500/- which had been claimed by the petitioner as deduction under Section 54 of the Act on the ground that the Petitioner had not provided any details regarding the reinvestment of the amount.
Pursuant to the SCN the Petitioner filed the deed of purchase of residential property and proof of investment made in bonds. However, the Assessing Officer states that the Petitioner has not disclosed the consideration received by her from sale of immovable property and thus the capital gain on the transaction remained undisclosed.
Mr. Ruchir Bhatia, counsel accepted notice on behalf of the Respondent and prayed for permit to file a counter affidavit within six weeks. Though the Assessing Officer is permitted to pass the assessment order, yet it is directed that the same shall not be given effect to and same shall be subject to further orders to be passed by the Court.
It was viewed that by way of notice under Section 148A(b) of the Income Tax Act, the Assessing Officer directed the petitioner to submit response with supporting documents on or before 31.03.2022, alleging that according to the information received pertaining to Financial Year 2017-18 the petitioner had entered into a sale transaction of immovable property for total consideration of Rs. 3,38,33,333/- with Shri Anil Gupta.
A division bench comprising Justice Rajiv Shakdher and Justice Girish Kathpalia held that “it is a clear case of non-application of mind by the Assessing Officer and consequently, the notice under Section 148A(b) of the Act, coupled with its corrigendum and followed by the consequent order under Section 148A(d) and notice under Section 148 of the Act cannot survive, so the same are hereby set aside.”
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