A fine of Rs. 10K was imposed by the High Court of Punjab and Haryana on the income tax department invalidating the order under Section 148A(d) of the Income Tax Act and the notice has also been issued following Section 148 of the Income Tax Act.
The panel of Justice G.S. Sandhawalia and Justice Lapita Banerji has stated that the notification under Section 148A(b) of the Income Tax Act dated March 19, 2022, which was not specifically delivered, and the subsequent directive under Section 148A(d) of the Income Tax Act issued on April 4, 2022, without providing an opportunity, would be considered against the natural justice principles.
The petitioner/assessee has contested the reassessment notice and the directive. Based on the information available to the department, it was observed that there was a sale transaction of immovable property for a sum of Rs. 1,21,00,000 during the relevant assessment year 2015-16.
The petitioner was informed of whether it constituted taxable income or not and was asked to provide reasons and present essential documents as evidence, along with the calculation of the capital gain resulting from the property sale.
Important: Legal Solution for Assessment & Reassessment Notice U/S 148 for Assessee
Since the notification dated March 19, 2022, was not specifically delivered and the subsequent order was issued on April 4, 2022, the court acknowledged that the petitioner-assessee has presented sufficient evidence to indicate that the notification and the subsequent order dated April 4, 2022, were served to the petitioner thereafter.
It is necessary to grant an opportunity to respond to the show cause notice, and therefore, the subsequent orders dated April 4, 2022, cannot be upheld solely on this basis, especially since enough needed evidence in the form of reports from the Post Office regarding the dispatch of documents has also been submitted.
The penal granted the petition imposing a fine of Rs. 10,000 to be paid to the petitioner assessee.
| Case Title | Nilam Mantri Versus ITO |
| Citation | CWP-12994-2022 |
| Date | 22.11.2023 |
| Counsel For Petitioner | Nikhil Goyal |
| Counsel For Respondent | Saurabh Kapoor |
| Punjab and Haryana High Court | Read Order |
