Whether writ may be allowed against 148 notice if assessee has already filed appeal?
Respected Members
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Short note of today's case law for quick reference:
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[2024] 471 ITR 604 (Bom)
[In The Bombay High Court]
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Sumathi Janardhana Kurup
v.
Income-Tax Officer
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K. R. Shriram and DR. MS. Neela Gokhale JJ.
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February 12, 2024.
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A.Y: 2015-16/Assessee????????
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1) For the AY 2015-16, the assessee initially received a notice dated 11.06.2021 u/s 148 which was not proceeded with.
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2) Subsequent to the Supreme Court judgment in UOI v. Ashish Agarwal [2022] 444 ITR 1, an initial notice u/s 148A(b) was served.
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3) The basis of issuing notice was the admission of a person and to have received cash from different customers, including the assessee for property transactions.
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4) Assessee denied having paid any cash to L, and contended that A.O. did not qualify to be within the ambit of section 149 as there was no income chargeable to tax in the form of an asset which had escaped assessment amounting to Rs. 50 lakh or more and therefore, the notice issued u/s 148 was not valid.
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5) Although the assessee has filed the appeal with CIT (A), assessee apprehend that they would be directed to deposit 20 per cent. of the tax demand which it could not pay.
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6) High Court held that: there was no tangible material to issue notice u/s 148A(b) or section 148.
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7) The only basis on which an allegation was made that the assessee had paid cash was a statement of some-body from L that it had received cash from the assessee.
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8) There was nothing on record to indicate that the assessee had paid the entire amount in question as on-money and the order had stated that the income of source for purchase of immovable property remained unexplained and therefore, it fell within the meaning of assets as per Explanation 1 to section 149.
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9) There was no explanation as to when it was the AO's case that the market value of the flat itself was only Rs. 51.55 lakhs, how the property could be valued at Rs. 64,94,200/-.
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10) This had been done, merely to get over the fetters placed under section 149(1)(b).
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11) The AO had not explained any of the factors.
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12) In the assessment year 2015-16, only a payment of Rs. 10 lakhs had been paid and the AO had not produced any evidence to show that any amount in excess of Rs. 50 lakhs had been paid.
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13) The entire basis for reopening the assessment was the letter received from L, which was not enough particularly when the assessee had denied having paid any cash to L.
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14) The onus was on the Revenue to show evidence that the assessee had paid in cash.
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15) The assessment is liable to be quashed.
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16) The statement of the assessee regarding withdrawal of the appeal was accepted.