IBRAHIM KHAN S/O SHRI HAJI RASOOL KHAN vs. INCOME TAX OFFICER, WARD-1

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CW/23552/2018HC RajasthanRJHC02100140201823 April 2024Author: AVNEESH JHINGAN,BHUWAN GOYAL3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the findings recorded by the Income Tax Officer in paragraph 3.5 of his order, which stated that the AO had not considered the sale consideration declared by the assessee in his ITR and that the proceeding was void, could not be sustained in light of the admitted fact that the petitioner had filed his Income Tax Return for AY 2011-12. The Court noted that while the revenue admitted the filing of the return, they contested the attachment of the computation. However, the ITO's own order acknowledged the non-consideration of the sale consideration declared in the ITR. Consequently, the impugned order dated October 4, 2018, rejecting the objections was set aside. The matter was remitted back to the Income Tax Officer for deciding the objections afresh, with a clear direction that the officer should not be influenced by the observations made in the impugned order and should decide it in accordance with law. The petitioner was directed to appear before the respondent No.1 on May 3, 2024.

What were the facts?

The petitioner, Ibrahim Khan, is challenging a notice dated March 27, 2018, issued under Section 148 of the Income Tax Act, 1961, and an order dated October 4, 2018, rejecting his objections. The assessment year in question is 2011-12. The Income Tax Officer (ITO) initiated proceedings under Section 148, alleging that the petitioner had sold an immovable property and had not filed an Income Tax Return disclosing the capital gain. The petitioner disputed the service of the notice. Upon receiving a notice under Section 142, the petitioner filed objections, arguing that the reopening was done without application of mind, as he had indeed filed his Income Tax Return for AY 2011-12 on March 30, 2012, with the capital gain duly reflected. The ITO rejected these objections.

What were the issues?

1. Whether the notice dated March 27, 2018, issued under Section 148 of the Income Tax Act, 1961, and the subsequent order dated October 4, 2018, rejecting the petitioner's objections are sustainable in law? Assessee's Contention: The petitioner argued that the reopening under Section 148 was initiated without application of mind. He contended that he had filed his Income Tax Return for Assessment Year 2011-12 on March 30, 2012, and the computation of income attached thereto duly reflected the capital gain arising from the sale of the immovable property. Therefore, the premise for reopening, i.e., non-filing of the return, was factually incorrect. Revenue's Contention: The revenue, through the Income Tax Officer's order, initially stated that the petitioner had not filed his Income Tax Return, making verification of the sale consideration impossible at that stage. However, in their reply to the writ petition, the respondents admitted the filing of the return but contested that the computation was not attached. The ITO's order itself noted that the sale consideration declared by the assessee in his ITR was not considered, making the proceeding void, but suggested it could be considered during assessment proceedings.

Which sections of the Income-tax Act were involved?

Section 148,Section 142

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
[2024:RJ-JP:19004-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 23552/2018 Ibrahim Khan S/o Shri Haji Rasool Khan, Aged About 73 Years, Kasali, Vpo, Kasali, Sikar. ----Petitioner Versus 1. Income Tax Officer, Ward-1, Income Tax Office, Sikar. 2. Income Tax Officer Ward 3(1), Jaipur, Room No. 221, 2Nd Floor, New Central Revenue Building, Statue Circle, Jaipur. ----Respondents For Petitioner(s) : Mr.Gunjan Pathak with Mr.Kanishk Singhal & Mr.Aditya Bohra For Respondent(s) : Mr.Sandeep Pathak HON'BLE MR. JUSTICE AVNEESH JHINGAN HON'BLE MR. JUSTICE BHUWAN GOYAL

Order 23/04/2024 AVNEESH JHINGAN, J (ORAL):-

1.

This petition is filed seeking quashing of notice dated 27.03.2018 issued under Section 148 of the Income Tax Act, 1961 (for short ‘the Act’) and order dated 04.10.2018 rejecting the objections filed against initiation of the proceedings under Section 148 of the Act.

2.

The brief facts are that the petitioner during the Assessment Year (for brevity AY) 2011-12 sold an immovable property. As per the department, the petitioner had not filed the Income Tax Return disclosing the capital gain.

3.

A notice dated 27.03.2018 was issued under Section 148 of the Act, service of which is disputed. On receipt of notice under Section 142 of the Act, in pursuance to the decision of the

[2024:RJ-JP:19004-DB] (2 of 3) [CW-23552/2018] A.Y. 2011-12 and in the computation attached thereto, the capital gain on sale of the immovable property was duly reflected.

6.

The objections were rejected on 04.10.2018. Para 3.5 of the order is quoted below:- ‘(3.5)-AO has not considered the sale consideration declared by the assessee in his ITR, hence, proceeding is void and required to be dropped. In the reasons, it is clearly mentioned that the assessee has not filed his ITR as such verification of sale consideration disclosed by the assessee was not possible at that time, however, the same may be considered during assessment proceedings.’

7.

Heard learned counsel for the parties and perused the pleadings.

8.

In Para 2 of the writ petition, the petitioned pleaded that the Income Tax Return along-with the computation of income for the A.Y. 2011-12 was filed. In the reply filed, the respondents have admitted filing of the return but has contested that the computation was not attached.

9.

In view of the reply filed, the findings recorded in Para 3.5 by the Income Tax Officer cannot be sustained. Consequently, the

[2024:RJ-JP:19004-DB] (3 of 3) [CW-23552/2018] impugned order dated 04.10.2018 is set aside and the matter is remitted back for deciding the objections afresh.

10.

It is clarified that while deciding the objections, the officer concerned shall not be influenced by the observations made in the impugned order and shall decide it in accordance with law.

11.

In order to avoid any further delay, let the petitioner through representative appear in the office of respondent No.1 on 03.05.2024 at 11:00 AM. (BHUWAN GOYAL),J (AVNEESH JHINGAN),J Monika/Sudeepak/45 Reportable Yes

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