DINESH KUMAR S/O SHRI HARI RAM vs. THE DEPUTY COMMISSIONER OF INCOME TAX

Facts

The petitioner, Dinesh Kumar, filed an income tax return for assessment year 2019-2020. The Deputy Commissioner of Income Tax (International Taxation) issued a notice dated 20.03.2023 under Section 148A of the Income Tax Act, 1961, based on information in Form 26AS/AIR indicating the purchase of an immovable property during that year. The petitioner responded, denying any property purchase and stating the information was incorrect and not related to him. He requested the material relied upon by the Department. Subsequently, an order dated 07.04.2023 was passed under Section 148A(d), deeming it a fit case for issuing a notice under Section 148. This writ petition challenges that order.

Held

The Tribunal held that the procedure prescribed under Section 148A of the Income Tax Act, 1961, was violated. The order under Section 148A(d) recorded that the petitioner had not filed a reply, which was contrary to the admitted fact that a reply was filed. The Tribunal noted that the order presumed the petitioner had no explanation because he allegedly did not furnish requisite details and supporting documents. Crucially, the order failed to consider the petitioner's denial of the transaction and his submission that Form 26AS/AIR did not reflect any property purchase by him during the relevant assessment year. The Tribunal concluded that the impugned order was passed without considering the petitioner's reply and without providing the material available with the Department. Therefore, the order was set aside for violating the prescribed procedure and guidelines. The matter was remitted back to the respondent No.1 (Deputy Commissioner of Income Tax) to proceed in accordance with law.

Key Issues

1. Whether the procedure prescribed under Section 148A of the Income Tax Act, 1961, has been followed in the present case, specifically whether the Assessing Officer considered the material on record and the replies filed by the assessee before passing a speaking order? Assessee's Contention: The petitioner argued that his reply was not considered, and the documents and material available with the Department were not supplied. He contended that the impugned order was passed mechanically, and paragraph 3 incorrectly stated that no reply was filed, which is an admitted fact that a reply was indeed filed. Revenue's Contention: The respondent submitted that the notice was issued based on information available with the Department.