Statement of Reportable Account u/s 285BA(1) does not amount to Transaction: Delhi HC sets aside Notice to Assessee [Read Order]

A Division Bench of the Delhi High Court has set aside the notice issued under Section 148A(b) of the Income Tax Act, 1961, to the petitioner-assessee, Ambika Kapur in which an impugned addition of Rs.3,79,08,575/- was made by the Assessing Officer.

The counsel for the petitioner contended that the respondent-revenue had initiated proceedings under section 148A of the Income Tax Act, 1961 on the incorrect assumption of fact that the petitioner had not filed the Income Tax return for the year 2018-19. The petitioner raised objection to this fact as the return was already filed and all the financial transactions alleged to have escaped the assessment were further disclosed. An alleged transaction amounting to Rs.3,79,08,575/- was not disclosed by the petitioner as she had no knowledge of the transaction.

On behalf of the revenue, the counsel Sanjay Kumar argued that the petitioner had not provided   a sale/purchase deed to the Assessing Officer and had not explained the transaction for the said amount.

The appellant, on rebuttal, stated that the sale/purchase deed was never asked for by the Assessing Officer and informed the court of the willingness to file the same at the direction of the court. It was further submitted on behalf of the assessee that the ‘statement of reportable account’ under Section 285BA(1) of the Act is not a transaction and that the said provision only casts a duty/obligation on the financial institution or bank to forward the details with regard to the high value transactions to the Income Tax Department.

It was observed by the bench comprising of Justice Manmohan and Justice Manmeet Pritam Singh Arora that, the Assessing Officer should have given some finding relating to the non-filing of the returns by the petitioner at least in the notice issued under Section 148A(b) of the Income Tax Act, 1961. The impugned order under the same was thus set aside along with instructions to the Assessing Officer to make a fresh decision in this regard in accordance with law.

The Assessing Officer was further notified that he was open to issue a supplementary notice with details of the transactions allegedly not reported by the assessee. A time period of two weeks was allowed for the Assessing Officer and the petitioner was directed to file a reply with the sale/purchase deed and supplementary reply, if required within four weeks.

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