The Delhi High Court has quashed the reassessment order and notice on the grounds that the information on the basis of which the assessment is sought to be reopened was fully examined in the earlier round of reassessment.
The bench of Justice Vibhu Bakhru and Justice Tushar Rao Gedela has observed that Section 148A(d) of the Act mandates that the AO is required to pass an order on the basis of record and considering the response to the notice under Section 148A(b) of the Act. The record indicates that the information on the basis of which the assessment is sought to be reopened was fully examined in the earlier round of reassessment under Section 147 read with Section 144B of the Income Tax Act.
The assessee/petitioner challenged the order and the notice is two-fold. First, that the order has been passed without considering that the information on the basis of which it is premised was the subject matter of reassessment proceedings, which culminated in an order dated 29.03.2022 passed under Section 147 read with Section 144B of the Act.
The petitioner’s contentions were accepted, and no addition was made. The petitioner contended that assessment cannot be opened twice for the same reason.
The second ground is that the notice is beyond the period of limitation. According to the petitioner, the limitation for issuance of the impugned notice expired on 31.03.2024.
The grounds on which the petitioner’s assessment is sought to be reopened revolves around transactions, by which the petitioner had sold 1,70,000 (One Lac Seventy Thousand) shares of a company named Trustline Real Estate Private Limited (TREPL) to one Mr Samir Dev Sharma at the rate of Rs.42 per share. The Assessing Officer (AO) suspects that the said shares were sold at an apparent consideration, which is below the fair market value with an intent to avoid tax.
The petitioner contended that her income for AY 2017-18 has been reassessed for the same reason that she had sold the shares of TREPL at a value, which was less than the fair market value.
The issue raised was whether the AO had reopened the assessment for AY 2017-18 for the same reason that has led the AO to pass the order holding that it is a fit case for issuance of the notice.
The court held that the petitioner’s response clearly stated that TREPL owned only two floors of the Friends Colony property and there is nothing credible on record that controverts it. The impugned order does not even advert to the issue.
Case Details
Case Title: Sarika Kansal Versus Assistant Commissioner Of Income Tax
Case No.: W.P.(C) 7940/2024 & CM APPL. 32747/2024
Date: 30.01.2025
Counsel For Petitioner: V.P. Gupta and Mr. Anunav Kumar
Counsel For Respondent: Anurag Ojha
