2022 (10) TMI 298 - HC - Income Tax

Reopening of assessment u/s 147 - as alleged notice issued u/s 148A(b) is that the petitioner has not filed ITR for the assessment year 2018-19 - HELD THAT - As it is the petitioner s case that all the high value transactions have been reported by the petitioner in its return of income and is willing to place on record the sale/purchase deed before the Assessing Officer, this Court sets aside the impugned order passed u/s 148A(d) of the Act as well as the notice issued under Section 148 and remands the matter back to the AO for a fresh decision in accordance with law. It shall be open to the AO to issue a supplementary notice explaining in detail the transactions, which were allegedly not reported by the petitioner within two weeks. The petitioner is also directed to file the sale/purchase deed as well as a supplementary reply, if required, with the AO within four weeks. AO is directed to pass a fresh order under Section 148A(d) of the Act within four weeks thereafter in accordance with law.

Summary

Issues Involved:
Challenge to order under Section 148A(d) of the Income Tax Act, 1961 for assessment year 2018-19 based on incorrect assumption of non-filing of return of income and alleged escaped assessment of financial transactions totaling Rs.30,57,78,545. Dispute over non-disclosure of one transaction amounting to Rs.3,79,08,575, and failure to provide sale/purchase deed to Assessing Officer. Interpretation of Section 285BA(1) duty on financial institutions regarding high value transactions.

Analysis:

1. The petitioner challenged the order passed under Section 148A(d) of the Income Tax Act, 1961, along with the notice issued under Section 148 for the assessment year 2018-19, alleging that the proceedings were initiated based on the incorrect assumption that the petitioner had not filed the return of income. The petitioner contended that all financial transactions were disclosed in the return, except for one transaction of Rs.3,79,08,575 for which the petitioner had no knowledge and requested details from the Respondent.

2. The Respondent argued that the petitioner did not provide the sale/purchase deed to the Assessing Officer and failed to explain the transaction involving Rs.3,79,08,575. The petitioner, in response, clarified that the sale/purchase deed was not requested by the Assessing Officer and expressed willingness to provide it if directed by the Court. The petitioner also highlighted that Section 285BA(1) imposes a duty on financial institutions to report high value transactions to the Income Tax Department.

3. The Court observed that the primary allegation in the notice was the non-filing of the Income Tax Return (ITR) for the relevant year, which was rebutted by the petitioner. The Court emphasized that the Assessing Officer should have addressed this fact in the order. Considering the petitioner's willingness to present the sale/purchase deed and the assertion that all high value transactions were reported in the return, the Court set aside the impugned order and remanded the matter to the Assessing Officer for a fresh decision. The Assessing Officer was directed to issue a supplementary notice detailing the unreported transactions within two weeks and the petitioner to submit the required documents within four weeks for a fresh order under Section 148A(d) within four weeks thereafter.

4. The Court disposed of the writ petition with the mentioned directions, leaving the rights and contentions of all parties open for further proceedings.