The Delhi High Court has held that reassessment proceedings commenced after 3 years are time-barred and given leeway to file a Return Of Income (ROI) since it has not been filed under the consequential notice issued under Section 148 of the Income Tax Act, 1961.
Mr Shlok Chandra, senior standing counsel appeared on behalf of the respondents/revenue and Mr Nitin Gulati appeared on behalf of the petitioner.
The Assessing Officer (AO) has triggered reassessment proceedings against the petitioner, Dhruv Suri as he had entered into high-value transactions, inter alia, concerning the subject immovable property. The subject immovable property was sold by the petitioner to two persons, i.e., Mr. Sriram Jayaraman Subramanian and Ms Kamakshi Sriram Iyer for a cumulative amount of Rs.1,20,25,000/-.
It was submitted that the petitioner had purchased the subject immovable property in 2010 for Rs.75,45,096/-. It was also Mr Gulati’s submission that the purchase of the subject property was partly funded through a loan taken from ICICI Bank amounting to Rs.67,26,641/-. The balance amount, we are told, was sourced through savings available with the petitioner.
According to the petitioner, he earned capital gains amounting to Rs.12,42,429/-. Besides this, the petitioner claimed that he also earned interest of Rs.419/- on the amount available in the account maintained with HDFC Bank.
The petitioner asserted that he had not earned any other income, apart from the amounts indicated hereinabove, from the sale of property and interest. On a perusal of the order passed by the AO under Section 148A(d) of the Income Tax Act, 1961 [Act], it was found that he has taken umbrage due to the petitioner’s failure to submit the sale deed/agreement to sell, certificate of transfer of rights by the builder and/or the possession letter.
It was argued that the reassessment proceedings have been commenced beyond three (3) years from the end of relevant AY, i.e., AY 2016-17, and, therefore, are time-barred. Mr Gulati conceded that the ROI has not been filed under the consequential notice issued under Section 148 of the Act.
A division Bench comprising Justice Rajiv Shakdher and Justice Girish Kathpalia disposed of the Writ Petition by giving the petitioner leeway to file the ROI within the next thirty (30) days.
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