2022 (9) TMI 41 - HC - Income Tax

Reopening of assessment u/s 147 - sale of the impugned property was duly recorded as the turnover of the Petitioner and a penalty u/s 271D read with Section 269SS - HELD THAT - This Court is of the view that the impugned order does not consider the contention of the petitioner that the amount received as consideration for the property has already been disclosed by the petitioner in its return and that the said fact had been admitted by the authorities in the penalty order passed under Section 271D - fact that TDS on the sale consideration was duly reflected in the Form 26AS as well as in the Income Tax Return has not been examined. Consequently, the impugned order under Section 148A(d) and the impugned notice under Section 148 of the Act, both dated 30th July, 2022 are set aside and the matter is remanded back to the Assessing Officer for a fresh decision. Petitioner is given liberty to file amended/additional reply to the notice issued under Section 148 of the Act within four weeks. The Assessing Officer is directed to pass an order under Section 148A(d) of the Act within four weeks thereafter in accordance with law.

Summary

Issues:
Challenge to order under Section 148A(d) of the Income Tax Act, 1961 and notice issued under Section 148 for AY 2017-18.

Analysis:
1. The petitioner, a property business company, challenged an order under Section 148A(d) of the Income Tax Act, 1961, and a notice issued under Section 148 for the Assessment Year 2017-18. The petitioner declared an income of Rs.16,36,874/- in its return filed on 15th January 2018. The issue arose from the alleged violation of Section 269SS of the Act related to a property sale transaction.

2. The petitioner had already been penalized under Section 271D for the same transaction. The petitioner contended that the sale of the property was duly recorded in its turnover, and taxes were paid accordingly. The matter was further complicated as the impugned order under Section 148A(d) did not consider the petitioner's disclosure of the Rs.56,00,000/- received as consideration for the property in its return.

3. The petitioner appealed the penalty order before the CIT(A) and later opted for settlement under the Direct Tax Vivad Se Vishwas Act, 2020. Despite providing evidence such as Form 26AS, the Revenue argued that the petitioner did not produce supporting documents before the Assessing Officer.

4. The High Court found that the impugned order failed to consider crucial aspects, such as the disclosure of the sale consideration in the return and the reflection of TDS in Form 26AS and Income Tax Return. Consequently, the order under Section 148A(d) and the notice under Section 148 were set aside, remanding the matter back to the Assessing Officer for a fresh decision.

5. The petitioner was granted the liberty to file an amended or additional reply within four weeks, and the Assessing Officer was directed to pass a new order within four weeks thereafter. The writ petition and application were disposed of, leaving the rights and contentions of all parties open for further proceedings.