HC: Decision U/S 148 Without Assuming the Assessee’s Response is Invalid

The Delhi High Court (HC) has ruled that the ruling made in accordance with section 148 of the Indian Constitution without taking the assessee’s response into account is invalid.

Under Section 148A(d) of the Income Tax Act, 1961 [“the Act”] Ashok Kumar Garg, the applicant has ordered on 30.03.2022 passed and the resulting notice of even date i.e., 30.03.2022, issued under Section 148 of the Act.

The Income Tax Department has the authority to review a person’s previously submitted income tax returns in accordance with Section 147 of the Income Tax Act of 1961. By delivering a notice under section 148 for income escaping assessment, the Assessing Officer may choose your income tax return for reassessment pursuant to specific pre-defined conditions.

The petitioner is accused of being the recipient of fraudulent purchase invoices provided by three organizations mentioned in the notice and the challenged ruling. It is the petitioner’s position that only two of the three companies identified have been dealt with.

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The amount of suspected fraudulent purchase invoices is Rs.24,10,705/-, whereas the amount in issue is just Rs.13,73,503/-. So, it is the petitioner’s position that Rs.10,37,202/- was incorrectly added. The revenue said that the response was on record, but the challenged judgment incorrectly states that the appellant did not give any answer.

The Assessing Officer (AO) was instructed by Justices Rajiv Shakdher and Tara Vitasta Ganju to conduct a de novo exercise after providing the petitioner with a reasonable opportunity, which would include providing the petitioner with copies of the approvals obtained in accordance with Section 151 of the Act as well as the information/material available to the AO.

The Court dismissed the writ petition in the aforementioned circumstances and gave the petitioner recourse rights if they felt wronged by the AO’s decision.