Facts of the Case

The petitioner, Sukhmeet Kaur, was served a notice dated 23.02.2023 under Section 148A(b) of the Income Tax Act, 1961. However, she failed to respond to the said notice.

Subsequently, the Assessing Officer (AO) proceeded to pass an order dated 21.03.2023 under Section 148A(d) of the Act. The allegation against the petitioner was that she had engaged in a high-value transaction involving immovable property for Assessment Year 2016–17 without filing an income tax return.

The petitioner contended that the same transaction had been erroneously considered twice by the revenue authorities and further clarified that she held only a 50% ownership in the said property.

Issues Involved

  1. Whether failure to respond to notice under Section 148A(b) deprives the petitioner of raising factual objections later.
  2. Whether reassessment proceedings can continue where the petitioner alleges duplication of the same transaction.
  3. Whether an opportunity of hearing and submission of documents should be granted before passing assessment order.

Petitioner’s Arguments

  • The Assessing Officer committed an error by considering the same property transaction twice.
  • The petitioner was only a 50% co-owner of the immovable property.
  • The reassessment proceedings were flawed due to incorrect appreciation of facts.

Respondent’s Arguments

  • The petitioner failed to respond to the statutory notice under Section 148A(b).
  • The allegation of duplication of transaction was denied by the revenue.
  • The petitioner should be allowed to present her case during reassessment proceedings if proper opportunity is granted.

Court’s Findings / Order

  • The Court noted that the petitioner did not respond to the notice under Section 148A(b), which was the appropriate stage to present her case.
  • The Court accepted the statement of the revenue that a show cause notice would be issued if no assessment order had been passed.
  • The writ petition was disposed of with directions:
    • The Assessing Officer shall issue a show cause notice.
    • Adequate time shall be given to the petitioner to respond.
    • The petitioner may file reply along with supporting documents.
    • The AO shall pass a reasoned assessment order after considering the reply.

Important Clarifications

  • The Court explicitly stated that it has not examined the merits of the case.
  • Any observations made in the order shall not affect the final assessment order.
  • The petitioner retains full liberty to present her case during reassessment proceedings.

 Link to download the order - https://delhihighcourt.nic.in/app/showFileJudgment/RAS12072023CW91682023_150558.pdf

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