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2023 (5) TMI 474 - HC - Income TaxValidity of orders and notices issued u/s 148 - Quantum of escaped income - determination of period of limitation - Unsecured loans taken from related and unrelated parties during FY 2014-15 - dispute with regard to the quantum of loan - HELD THAT - Strangely, the AO while noticing the reply filed by the petitioner, has adverted to the amount said to have been repaid by the petitioner to the Jain brothers - This aspect of the matter emerges by reading together both paragraph 8.1 of the order passed under Section 148A(d) and the order dated 16.03.2023, whereby the objections filed by the petitioner were disposed of by the AO. There is a complete non-application of mind. The payment of loan by the petitioner could not have been added to the loan amount, which the petitioner claims, was received from unrelated parties - the attempt appears to be to, somehow, take the amount which, according to the AO, escaped assessment, over the threshold limit of Rs. 50 lakhs. The impugned order passed under Section 148A(d), the consequential notice issued under Section 148 of the Act and the order dated 16.03.2023 cannot be sustained - Petition disposed off.
Issues involved: Challenge to order under Section 148A(d) and consequential notice under Section 148 of the Income Tax Act, 1961; Challenge to notice issued under Section 148A(b); Challenge to order passed by the Assessing Officer (AO) regarding objections filed by the petitioner.
Issue 1: Order under Section 148A(d) and consequential notice under Section 148: The petitioner challenged the order dated 31.07.2022 passed under Section 148A(d) and the consequential notice issued on the same date under Section 148 of the Income Tax Act, 1961. The petitioner contended that the order and notice could not be sustained due to a non-application of mind by the AO. The AO's attempt to include the repayment of loans in the total amount received by the petitioner was deemed inappropriate by the court. The court set aside the orders and notices, granting liberty to the AO to conduct a fresh assessment after providing a personal hearing to the petitioner and ensuring all relevant materials are furnished. Issue 2: Challenge to notice under Section 148A(b): The petitioner also challenged the notice dated 27.05.2022 issued under Section 148A(b) of the Act. In response to this notice, the petitioner claimed to have received unsecured loans from related and unrelated parties during the relevant financial year. The petitioner admitted to receiving a lesser amount than what was alleged in the notice, specifying the sources of these loans from both related and unrelated parties. The court noted discrepancies in the AO's assessment and directed a fresh assessment to be conducted. Issue 3: Challenge to order passed by the Assessing Officer (AO): Additionally, the petitioner contested the order dated 16.03.2023 passed by the AO, where objections raised by the petitioner were disposed of. The AO's decision to consider the repayment of loans in the total transaction amount was found to be erroneous. The court emphasized the need for a proper assessment without adding the repayment amounts to the loan received, setting aside the order and directing a fresh assessment with a personal hearing for the petitioner.
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