Re-assessment notice quashed for violating the mandate of Section 148(2) of IT Act; Revenue found to play subterfuge

Delhi High Court: A Division Bench comprising of S. Ravindra Bhat and A.K. Chawla, JJ. allowed a writ petition filed against the notice of re-assessment issued by the revenue under Section 147 and 148 of Income Tax Act, 1961.

The case relates to assessment for the year 2004-05. The original return filed by the petitioner was not accepted and re-assessment notice was issued. After repeated requests, the reasons to believe recorded by the Assessment Officer were furnished to the petitioner-assessee. The petitioner filed objections to the said notice which were turned down. Consequently, he approached the High Court for relief.

The High Court perused the notice impugned and found that the reasons to believe were recorded subsequent to the issuing of such notice. This was contrary to the mandate of Section 148(2), according to which the reasons to believe have to be recorded prior to the issuing of notice. Further, it was also found that new page numbers were assigned to old pages in order to manipulate the placement of documents. Also, the font of the text on pages did not match. In such circumstances, it was held that the Revenue played a subterfuge in ante dating the record. Investigation for the same was directed. Resultantly, the petition was allowed and the notice impugned was quashed. [Prabhat Agarwal v. CIT,2018 SCC OnLine Del 10598, dated 16-8-2018]

 

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