2023 (8) TMI 1119 - HC - Income Tax

Validity of Reopening of assessment - deduction claimed u/s 54 - HELD THAT - As alongwith her reply to notice u/s148A(b) of the Act the petitioner had duly submitted a copy of the concerned sale deed as well as copies of the NHAI Bonds in support of her claim of deductions, but apparently the same were not noticed by the AO which led to passing of the impugned order u/s 148A(d) and issuance of notice u/s 148 of the Act. Not only this, it is also contrary to record to allege that the petitioner did not disclose the amount in her return of income for the Assessment year 2018-19. The copy of the said Income Tax Return for the Assessment Year 2018-19 appended to the writ petition, clearly discloses the said sale consideration coupled with the deductions claimed as described above. Apparently, prior to issuance of notice under Section 148A(b) of the Act, the Assessing Officer failed to notice the said disclosures. Thus the irresistible conclusion we reach is that it is a clear case of non-application of mind by the Assessing Officer and consequently, the notice under Section 148A(b) need to be set aside - Decided in favour of assessee.

Summary

Issues involved:
The issues involved in this case include challenging the Impugned Order, Final Notice, Corrigendum, and Show Cause Notice issued under various sections of the Income Tax Act for the Assessment Year 2018-19.

Issue 1 - Jurisdictional Challenge:
The petitioner challenged the order and notices issued under different sections of the Income Tax Act, claiming that the Assessing Officer was not the Jurisdictional Assessing Officer. The petitioner argued that the reassessment proceedings were based on transactions already declared in her return of income. Discrepancies were highlighted between the grounds mentioned in the show cause notice and the subsequent order issued by the Assessing Officer.

Issue 2 - Compliance and Rejection of Contentions:
The Assessing Officer directed the petitioner to submit a response with supporting documents regarding a sale transaction of immovable property and capital gains. The petitioner provided detailed replies with necessary documents, including sale deeds and investment proofs. Despite this, the Assessing Officer issued a corrigendum and subsequent order rejecting the contentions of the petitioner, alleging non-disclosure of crucial information and failure to provide supporting documents.

Judgment:
Upon examination of the record and submissions from both sides, the court found that the Assessing Officer's rejection of the petitioner's contentions was not sustainable. The court noted that the petitioner had indeed provided the required documents and disclosures in her responses, which were overlooked by the Assessing Officer. It was concluded that there was a clear case of non-application of mind by the Assessing Officer, leading to the setting aside of the notices and orders issued under various sections of the Income Tax Act.

Conclusion:
The writ petition was allowed, setting aside the impugned notices and orders. The Assessing Officer was granted liberty to take further steps in accordance with the law. The court emphasized the importance of proper consideration of submissions and documents by the Assessing Officer to avoid such discrepancies in future proceedings.