2024 (4) TMI 197 - HC - Income Tax

Validity of reopening assessment - non service of notice - as alleged petitioner was not provided with an opportunity before re-opening the assessment - A notice was sent to the address registered with the petitioner s PAN and also to the address shown as the petitioner s residential address in her sale deed but petitioner claims that she is not residing in any of these addresses and has failed to avail the opportunity. It is the case of the petitioner that she purchased an immovable property at Chennai for a sale consideration on the file of the Sub Registrar Neelangarai Chennai and of the total sale consideration part sum was sourced through housing loan from ICICI Bank and the balance sum was received from her husband who was a tax non-resident living abroad and earning income from consultancy assignments from Muscat Oman and Atyrau Kazakhstan. According to her these are foreign source income having no tax liability in India. It is her further case that she is a Home Maker and since she purchased the property without earning any taxable income she did not file any returns at that time and now pursuant to the proceedings she has filed the returns. HELD THAT - Be that as it may the issue is at the stage of enquiry and the petitioner would be provided with an opportunity of personal hearing. The arguments advanced by the petitioner has to be considered at the time of enquiry by the respondent. In view of the above position and in view of the decision of the Hon ble Supreme Court in Anshul Jain s case ( 2022 (10) TMI 3 - SC ORDER this writ petition stands disposed of with liberty to the petitioner to approach the respondent along with required materials. The respondent shall consider the case of the petitioner the points raised by her in the reply and thereafter pass appropriate orders on merits

Summary

Issues:
The judgment involves the re-opening of assessment u/s 148A(d) of the Income Tax Act, 1961 without providing the petitioner with an opportunity to be heard and without considering her representation dated 26.07.2023.

Relevant Details:

1. The petitioner raised the issue that approval for re-opening the assessment was granted by the competent authority through a non-speaking order without assigning any reason. The petitioner's reply dated 26.07.2023 was not considered before passing the re-opening order u/s 148A(d) of the Act on 31.03.2023.

2. The petitioner, a Home-Maker, purchased a property using her husband's income and a loan from a Nationalized Bank, both sources being exempt from taxable income. Despite this, the respondent re-opened the assessment without considering these facts or providing the petitioner with an opportunity to be heard.

3. The respondent issued notices to the petitioner's old address in Karaikudi and her Chennai address mentioned in the sale deed, both of which were returned as door locked. The respondent proceeded with re-opening the assessment under Section 148A based on this.

4. The petitioner filed a revised return of income on 22.07.2023 and obtained an interim stay order before the assessment process could proceed further. The petitioner's objections and grievances are to be addressed during the re-assessment proceedings.

5. The Court acknowledged the petitioner's grievance of not being provided with an opportunity before re-opening the assessment. The petitioner's detailed reply on 26.07.2023 was submitted after the re-opening order was passed, hence not considered by the respondent.

6. The petitioner explained that she purchased an immovable property in Chennai using a combination of a housing loan and funds received from her non-resident husband earning foreign-sourced income, which is not taxable in India. The petitioner, being a Home-Maker without taxable income, did not file returns initially but has done so now.

7. The judgment was disposed of with liberty given to the petitioner to approach the respondent with necessary materials. The respondent is directed to consider the petitioner's case, the points raised in her reply dated 22.07.2023, and provide a personal hearing to the petitioner before passing appropriate orders in accordance with the law.