- In the notice u/s 148(b) transaction about purchase of property in the year under consideration for Rs. 99,51,000/- referred and merely on the finding that return for the year under consideration not filed amount of purchase of property alleged as income for the year under consideration. Going through the notice u/s 148(b) it appears that same has been issued without any application of mind and merely because system flagged PAN as non-filer of return and a property for Rs. 99,51,000/- purchased during the year under consideration. Apparently amount invested in property cannot be considered as income of the buyer unless source of amount investment not genuine. There is no mandatory requirement of filing a return of income tax in the year in which immovable property purchased by a person. Filing of return is mandatory in case income of individual exceeds from basic exemption limit.
- Your good is requested to consider provisions of section 148A which mandate to follow step by step procedure provided in four clauses in the section. All four clauses to be proceed step by step and non-following any one step lead the procedure invalid. As per clause (a) of section 148A assessing officer required to conduct enquiry wherever situation suggest for same. Where purchase of property by itself is not a taxing event presumption that income to the extent investment in the property has escaped assessment is only a hypothetical presumption. Property can be purchased from non-taxable income or from earning of earlier years or from borrowing or from the taxable income of the year in which property purchased or combination of one or more type of inflow of fund. Therefore merely on the finding that property has been purchased during the year under consideration and return of income not filed by no mean permit the assessing officer to jump to the conclusion that income for the year under consideration has been escaped from assessment. To deal with such situation provision for conducting enquiry has been provided under clause (a) of section 148A. Provision of section 148A(a) are not optional but mandatory and direct to conduct enquiry, if required.
- In case any enquiry conducted as provided u/s 148A(a) before issuance of notice u/s 148A(b), fact shall be coming on record that consideration of the property registered in the year under consideration has been paid in earlier year and no income can be assessed in the year under consideration on the finding that property has been registered in the year under consideration.