Foreign Remittance on Sale of Immovable Property by Late Father: Delhi HC Quashes Income Tax Notice against NRI [Read Order]

The Delhi High Court quashes income tax notice against Non Resident in India (NRI) in the matter of foreign remittance on the sale of the immovable property by the late father.

The present writ petition is directed against the notice issued under Section 148A(b) of the Income Tax, 1961. Besides this, challenge is also laid to the assessment order passed under Section 148A(d) of the Income Tax Act. In addition thereto, challenge is also laid to the consequential notice of even date issued under Section 148 of the Income Tax Act. The petitioner in the matter is Dr Ashok Kumar Sinha.

The counsel for the petitioner submitted, that the impugned order and consequential notice have been passed, without taking into account the detailed response filed by the petitioner, to explain the charge levelled against him, which is, that outward foreign remittance made by him had, purportedly, escaped assessment.

It was thus, submitted that although the Assessing Officer (AO) has extracted several parts of the petitioner’s response, there has been no application of mind, with regard to the information contained therein. Broadly, it is the petitioner’s case, that the foreign remittance came be to be made on account of sale of immovable property by his late father i.e., one Dr. Achyutanand Sinha, and other amounts which stood credited to his account.

It is also the petitioner’s case, that his father i.e., Dr. Achyutanand Sinha had distributed a large part of the credit balance obtaining in his account between the petitioner and his sibling. Upon the death of the father, his account, maintained with SBI, which was jointly held by the petitioner, was converted into a Non-Resident Ordinary (NRO) account, and thereafter the remaining amount was remitted to the petitioner’s bank account maintained with the Barclays Bank, in England.

A Division Bench of the Court comprising Justice Rajiv Shakdher and Justice Girish Kathpalia observed that “Accordingly, the impugned order and notices are set aside. The AO will take into account the assertion(s) made in the writ petition and the accompanying documents. Besides this, documents which are already filed by the petitioner with the AO will also be considered. Thereafter, the AO will examine, whether the reassessment proceedings need to be taken forward.”

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