2024 (1) TMI 67 - HC - Income Tax

Reopening of assessment u/s 147 - notice under Section 148A(b) - period of limitation - petitioner has filed reply to such notices contending that she is a permanent resident of Canada and that she and her husband have purchased an immovable property in Bengaluru way back in the year 1996 under the Sale Deed - HELD THAT - As per the terms of Section 149 notice u/s 148 cannot be issued, after three years have elapsed from the end of the relevant assessment year, unless income chargeable to tax which has escaped assessment is likely to amount to Rupees Fifty Lakh or more, and as such, Sri. E. I. Sanmathi, the learned standing counsel for the respondents, does not contest the third limb of the petitioner s case as canvassed by Sri. A Shankar. Further, Sri. E.I. Sanmathi, given the details of the payment of the sale consideration as set forth in the Sale Deed dated 13.04.2015, cannot dispute that the entire consideration is received by the petitioner s husband and because he did not have PAN, the TDS could be uploaded to the petitioner s PAN. It would be reasonable to opine that the petitioner could only have received 50% of the sale consideration Income . The petitioner must succeed, and the petition must be allowed quashing the impugned notices as well as the order. Hence, petition is allowed, and the impugned the Notices issued u/s 148A(b).

Summary

Issues involved:
The judgment involves challenging Notices under Section 148A(b) of the Income Tax Act, 1961 for Assessment Year 2016-17 and the subsequent Orders under Section 148A(d) for the same year.

Details of the Judgment:

Issue 1: Notices under Section 148A(b)
The petitioner contested Notices dated 11.01.2023 and 24.02.2023 issued under Section 148A(b) for the Assessment Year 2016-17. The Notices were based on the petitioner's sale of immovable property and failure to file returns, leading to unexplained income from capital gains.

Issue 2: Adjudication Order under Section 148A(d)
Despite the petitioner's explanations, an Adjudication Order dated 31.03.2023 was issued under Section 148A(d), stating that the petitioner's submissions were insufficient and that the capital gains from the property sale were undisclosed due to lack of supporting documents.

Petitioner's Arguments:
The petitioner, through Senior Counsel Sri. A. Shankar, argued that the property was jointly owned with her husband, and the entire sale consideration was received by him. Even if she received any part, it would be below the threshold for tax assessment, thus challenging the proceedings.

Legal Analysis:
The judgment highlighted that under Section 149 of the IT Act, Notices cannot be issued after three years unless the unassessed income exceeds a specified amount. The respondent did not contest that the income in question did not meet this threshold, supporting the petitioner's case.

Conclusion:
Considering the evidence presented, it was concluded that the petitioner's case was valid, and the impugned Notices and Orders were quashed. The judgment allowed the petition, thereby nullifying the actions taken under Sections 148A(b) and 148A(d) for the Assessment Year 2016-17.