2022 (12) TMI 38 - HC - Income Tax

Reopening of assessment - notice issued u/s 148A(b) - Mistake in notice issued - HELD THAT - AO is personally present in Court today. He admits that the impugned order passed under Section 148A(d) of the Act is riddled with mistakes. He further admits that in the notice issued u/s 148A(b) details of the transactions allegedly carried out by the petitioner were not correct. He states that the transactions were clarified by the ITO (Inv), Unit-7, Delhi in its e-mail dated 14th July, 2022, which he had incorporated in the order passed under Section 148A(d) of the Act. The impugned order passed u/s 148A(d) and the impugned notice issued under Section 148 of the Act are set aside and the AO is directed to issue an amended notice under Section 148A(b) of the Act along with the incriminating material in its possession to the assessee within two weeks. The assessee is given liberty to file a reply to the amended notice within four weeks. AO is, thereafter, directed to decide the matter afresh within a further period of four weeks in accordance with law.

Summary

Issues:
Challenging notice under Section 148A(b) of the Income Tax Act, 1961; Errors in the order under Section 148A(d) and notice under Section 148; Correct attribution of transactions; Mistakes in the impugned order; Setting aside the impugned order and notice; Issuing amended notice and providing opportunity to respond.

Analysis:
The petitioner filed a writ petition challenging a notice under Section 148A(b) of the Income Tax Act, 1961, an order under Section 148A(d), and an impugned notice issued under Section 148. The counsel for the petitioner highlighted discrepancies in the attribution of transactions in the notices. Initially, transactions worth Rs.50,40,000 were attributed to one entity and Rs.48,54,000 to another, but in the impugned order, these attributions were swapped. The Assessing Officer admitted mistakes in the impugned order and clarified that the details of transactions in the notice were incorrect. The Assessing Officer acknowledged errors in the order and the incorrect details of transactions, which were later clarified in an email. Consequently, the impugned order and notice were set aside. The Assessing Officer was directed to issue an amended notice under Section 148A(b) along with the relevant material to the assessee within two weeks. The assessee was granted four weeks to respond to the amended notice, and the Assessing Officer was instructed to decide the matter afresh within a further four weeks.

The court, with the mentioned directions and liberty, disposed of the writ petition and application, leaving the rights and contentions of all parties open. The judgment emphasized correcting the errors in the order and notice, ensuring the proper attribution of transactions, and providing the assessee with the opportunity to respond to the amended notice. The decision aimed to uphold the principles of natural justice and fair assessment procedures under the Income Tax Act, 1961.