Validity of reopening of assessment - need for a direct link between the portal's information and the income allegedly escaping assessment

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..... under Section 148. Key Issues * Challenged Income Tax Order: The petitioner challenges an order and notice related to transactions specified in an annexure, claiming that the transactions led to income escaping assessment. * Basis of Notice: The Income Tax Department based its notice on information obtained from the Insight Portal as part of its risk management strategy. * Allegations .....

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..... transactions and gifts alleged by the petitioner, which were crucial for assessing the income. * Discrepancies in Show Cause Notice and Order: The court found discrepancies between the show cause notice and the impugned order, particularly regarding the differential sum assessable under Section 56(2)(vii)(b) of the Income Tax Act. * Quashing of the Impugned Order: The court quashed the imp .....

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..... tunities for taxpayers to respond. * Judicial Oversight: The judgment illustrates the role of judicial review in ensuring that tax authorities adhere to legal standards and procedures. Conclusion The Madras High Court's judgment in 2024 (1) TMI 612 addresses critical issues regarding the use of digital information for tax assessment and the procedural requirements for issuing notices und .....

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