Relevant Stage to bring Facts is when Notice u/s 148A(b) of Income Tax Act is Served: Delhi HC allows Assessee to file Reply to SCN [Read Order]

In a recent decision the Delhi High Court observed that the Relevant Stage to bring Facts is when Notice under Section 148A(b) of the Income Tax Act, 1961 is served and the High Court thereby allowed the assessee to file reply to Show Cause Notice (SCN).

The case set up against the petitioner, Sukhmeet Kaur, is that she had entered into a high value transaction concerning an immovable property, qua which there was no visibility, since the petitioner had not filed her income tax return for the Assessment Year (AY) in issue, i.e., AY 2016-17. The petitioner claimed that the AO has committed an error, inasmuch as the transaction qua the same property has been taken into account twice over.

It was not disputed by the counsel for the petitioner that although a notice was served on the petitioner under Section 148A(b) of the Income Tax Act, 1961 and she failed to respond to the same. Furthermore, it is stated by the counsel for the petitioner submitted that the petitioner was a 50% owner of the subject immovable property.

Given these circumstances, Shlok Chandra, senior standing counsel, who appeared on behalf of the respondents/revenue, argued that if an assessment order is not passed, the AO will issue a show cause notice, and the petitioner will have liberty, at that stage, to put forth her stand vis.-a-vis. the transaction in issue, along with the relevant documents.

A Division Bench comprising Justices Rajiv Shakdher and Girish Kathpalia observed that “Unfortunately, these facts were not brought to the notice of the AO by the petitioner at the relevant stage. The relevant stage for bringing these facts to the notice of the AO was when the notice under Section 148A(b) of the Income Tax Act was served on the petitioner.”

“The writ petition is thus, disposed of, with a direction that the AO will issue a show cause notice to the petitioner. The show cause notice will grant sufficient time to the petitioner to file a response” the Bench concluded.

To Read the full text of the Order CLICK HERE

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