The Punjab and Haryana High Court imposed Rs. 10,000 costs on income tax dept on failure to serve notice under Section 148A(b) of the Income Tax Act, 1961.
The prayer in the present writ petition filed under Articles 226 and 227 of the Constitution of India is for quashing notice under Section 148A(b) of the Income Tax Act along with notice issued under Section 148 of the Income Tax Act, 1961 and the order passed under Section 148A(d) of the Income Tax Act.
The petitioner submitted that the notice was issued under Section 148A(b) of the Income Tax Act which was allegedly served through registered e-mail as well as speed post. The claim of the petitioner is that the said notice was never served upon the assessee and, therefore, an opportunity is required to be granted under the said Section.
A Division Bench comprising Justices GS Sandhawalia and Lapita Banerji observed that “We have gone through the said notice wherein on the basis of the information available with the Revenue, it was noticed that there was a sale transaction of immovable property for sale consideration of Rs.1,21,00,000/- during the relevant assessment year 2015-16. In such circumstances, the petitioner had been put to notice that whether it is taxable income or not and the reason was to be given along with supporting documents apart from submitting the calculation of capital gain arising out of the sale of the property.”
The Court also noted that “we are of the considered opinion that an opportunity to file reply to show cause notice is required to be given and accordingly the subsequent orders dated 04.04.2022 are not liable to be sustained on this short ground since sufficient material by way of reports of the Post Office regarding the dispatch of documents as such have also been placed on record. Replication filed also has not been controverted by filing any rejoinder though even a period of more than 10 months has gone by when the replication was taken on record. An adverse inference is, thus, to be drawn against the respondent-Revenue.”
“Accordingly, the present writ petition is allowed with Rs.10,000/- as costs imposed upon the respondent-Revenue, to be paid to the petitioner. Notice and order, both dated 04.04.2022 are quashed. The petitioner shall file reply to the notice within a period of 15 days from today and it is open to the Revenue to proceed in accordance with law, thereafter” the Court concluded.
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