Section 148A(b) Notice Not Specifically Served On Assessee: Punjab And Haryana High Court Imposes Rs. 10K Cost On Dept.

The Punjab and Haryana High Court has imposed a cost of Rs. 10K on the income tax department and quashed the order under Section 148A(d) of the Income Tax Act and the notice under Section 148 of the Income Tax Act.

The bench of Justice G.S. Sandhawalia and Justice Lapita Banerji has observed that the notice under Section 148A(b) of the Income Tax Act dated March 19, 2022, not having been specifically served and the order under Section 148A(d) of the Income Tax Act having been passed thereafter on April 4, 2022, without giving an opportunity, would violate the principles of natural justice.

The petitioner/assessee has challenged the reassessment notice and order. On the basis of the information available with the department, it was noticed that there was a sale transaction of immovable property for a consideration of Rs. 1,21,00,000 during the relevant assessment year 2015-16. The petitioner had been put to notice that it was taxable income or not, and the reason was to be given along with supporting documents apart from submitting the calculation of capital gain arising out of the sale of the property.

The notice dated March 19, 2022, not having been specifically served, and the order having been passed on April 4, 2022,

The court noted that the petitioner-assessee has provided sufficient material to show that apparently the notice and the subsequent order dated April 4, 2022 were served thereafter upon the petitioner. An opportunity to file a reply to show cause notice is required to be given, and accordingly, the subsequent orders dated April 4, 2022, are not liable to be sustained on this short ground since sufficient material by way of reports from the Post Office regarding the dispatch of documents as such has also been placed on record.

The court allowed the petition with a cost of Rs. 10,000 to be paid to the petitioner assessee.

Counsel For Petitioner: Nikhil Goyal

Counsel For Respondent: Saurabh Kapoor

Case Title: Nilam Mantri Versus ITO

Case No.: CWP-12994-2022

Click Here To Read The Order