The central legal point established in the judgment is the duty of the Assessing Officer to consider all relevant evidence before making an assessment under the Income Tax Act.

JUDGMENT

[Physical Hearing/Hybrid Hearing (as per request)]

Rajiv Shakdher, J. (Oral)

CM Appl.28271/2023

1. Allowed, subject to the petitioner filing legible copies of the annexures, at least three days before the next date of hearing.

W.P.(C)7266/2023& CM Appl.28270/2023[Application filed on behalf of the petitioner seeking interim relief]

2. Issue notice.

2.1. Mr Abhishek Maratha, learned senior standing counsel, accepts notice on behalf of the respondent/revenue.

3. Given the directions that we propose to issue, Mr Maratha says that no counter-affidavit is required to be filed, and he will rely on the record presently available with the Court. Therefore, with the consent of the counsel for the parties, the matter is taken up for final hearing and disposal, at this stage itself.

4. This writ petition concerns Assessment Year (AY) 2017-18. The allegation levelled against the petitioner via notice dated 19.05.2022 issued under Section 148A(b) of the Income Tax Act, 1961 [in short, "Act"] is, that it had sold an immovable property worth Rs.8 crores, and that capital gains earned had not been disclosed.

4.1. The record shows, that the petitioner filed a response to the aforementioned notice, which is dated 03.06.2022.

4.2. Inter alia, the petitioner pointed out, that it had not sold any property, and instead bought the property. The details of the transaction are also provided in the said response.

5. Pertinently, the petitioner had indicated in the reply, that the purchase consideration of subject property was Rs.8 crores, and that tax at source had been deducted at the rate of 1%, which was deposited via the prescribed form i.e., Form 26QB.

5.1. In support of this assertion made in the reply, the copy of Form 26AS was annexed.

6. It is important to note, that prior to the issuance of notice under Section 148A(b) of the Act, the petitioner had also been served a notice under Section 133(6) of the Act. This notice is dated 25.03.2021. The petitioner, it appears, responded to the said notice, and furnished information that had been sought.

7. The Assessing Officer (AO), having realized that the allegation made was grossly erroneous i.e., that the petitioner had not sold the subject property and had instead purchased the same, turned the allegation on its head.

8. A perusal of the impugned order dated 28.07.2022 passed under Section 148A(d) of the Act shows, that the AO concludes, that income on transaction worth Rs.8,48,00,000/- had escaped assessment.The rationale provided for the same is contained in paragraph 7 of the said order. For the sake of convenience, the same is extracted hereafter:

"7. Reply of the assessee has been considered. Due to certain mistake in the information provided, earlier it was believed that the assessee had sold the immovable property. However, it is now clear that the assessee had indeed purchased the immovable property. The following points are notable in context of the information available on record:

(i) Assessee has though claimed that it had filed reply to the notice u/s 133(6) dated 25.03.2021. Though there is nothing on record to prove that the assessee had filed any reply.

(ii) From the verification made on e-filing portal, it is noted that no form 26 QB has been filed by the assessee showing this particular transaction in AY 2017-18. Therefore, it cannot be ascertained that TDS has been deducted on the said transaction. Also, the assessee has not provided the copy of Form 26QB.

(iii) There is no declaration of this asset (acquired for a total of Rs.8,48,00,000, including stamp duty) in the return of income as is evident from close perusal of the respective columns of Balance Sheetsection of the ITR form or the copy of balance sheet uploaded with the Form 3CA/3CD (audit report). Also the Auditor has not reported the said purchase in respective column 34(a) of the Form No.3CD for the year under consideration. It means the acquisition was not disclosed to the auditor either. The payments appe