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2023 (3) TMI 154 - HC - Income TaxReopening of assessment u/s 147 - validity of notice u/s 148A - serious allegations of breach of principle of natural justice and issuance of notice u/s 148 - HELD THAT - Since the order has been disposed off in complete disregard to the details which have been furnished, in our opinion, it is in breach of principles of natural justice and the matter shall need to be sent back to the officer concerned from the stage where he has committed serious error in not complying with the statutory requirements. The least that could have been done is to follow the principles of natural justice and also adhere to the provisions prescribed under the statute. We appreciate the fairness on the part of the learned counsel for the other side. The order u/s 148A(d) as well as notice u/s 148A of the I.T. Act need to be quashed.
Issues:
Challenge to notice under Section 148 of the Income Tax Act, 1961 and order passed under Section 148A(d) for Assessment Year 2015-16. Analysis: 1. The petitioner, a resident of the United Arab Emirates and a Non-Resident Indian, made investments in equity shares of an Indian company through the FDI route. The shares were later sold to different persons as per valuation under the Income Tax Act. 2. The respondent issued a show-cause notice under Section 148A(b) regarding the issuance of the Section 148 notice, seeking information on remittances. 3. Despite the petitioner's requests for adjournment due to bank strike and holidays, the respondent proceeded with reassessment, alleging an escapement of income chargeable to tax. 4. The petitioner approached the High Court seeking to quash the impugned notice and order, along with a stay on further proceedings for the assessment year. 5. The Court noted breaches of natural justice in the respondent's actions, emphasizing the need to adhere to statutory requirements and principles of fairness. 6. The Court allowed the petition, quashing the order under Section 148A(d) and the notice under Section 148A, directing the respondent to provide an opportunity for the petitioner to furnish additional documents before reassessment. 7. The judgment clarified that the findings should not prejudice either party's rights, and a civil application related to the matter was disposed of accordingly.
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