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IN THE HIGH COURT OF DELHI
Manmohan, Manmeet Pritam Singh Arora, JJ.
Usha Rani Girdhar - Appellant
Versus
Income Tax Officer Ward 36(1), Delhi - Respondent
W.P.(C) 16090 of 2022 & C.M. Nos. 50220-50221 of 2022
Decided On : 25-11-2022
Important Points
Subject
Tax Law - Income Tax
Headnote
(B) Rule of Adequate Defense - The purpose of notice under Section 148A(b) is to inform the assessee of allegations with enough details to facilitate a proper defense - Found negligence on the part of the assessing officer in issuing incorrect notices and clarified procedural breaches in notice issuance. (Paras 8-9)
Facts of the case:
The writ petition was filed against notices for income not declared regarding property sales, where discrepancies in sale consideration and circle rates led to the challenge. The notices were deemed barred by limitation with respect to the alleged income that escaped assessment.
Findings of Court:
The notices issued were set aside due to conflicting details and defective procedural adherence. The court allowed the revenue authorities to initiate appropriate actions if permitted by law.
Issues: Whether the notices under Sections 148 and 148A(b) were valid despite contradictions and inaccuracies regarding property sale transactions.
Ratio Decidendi: The court reiterated that notices must contain clear foundational allegations; negligence in information provision by the assessing officer undermines enforcement of proper legal procedures.
Result: Writ petition allowed; notices set aside.
| Table of Content |
|---|
| 1. challenge to income tax notice issued. (Para 1) |
| 2. argument on limitation for tax assessment. (Para 2 , 3) |
| 3. court's observation on mistakes in notices. (Para 4 , 5 , 6 , 7) |
| 4. legal principle on sufficiency of notice details. (Para 8 , 9) |
| 5. verdict on writ petition and notice set aside. (Para 10) |
JUDGMENT
Manmohan, J. (Oral):
1. Present writ petition has been filed challenging the notice issued under Section 148 of the Income Tax Act, 1961 (`the Act') dated 25th June, 2021 as well as the notice issued under Section 148A(b) of the Act dated 21st May, 2022, order passed under Section 148A(d) of the Act dated 29th July, 2022 and the notice issued under Section 148 of the Act dated 30th July, 2022 for the Assessment Year 2017-18.
2. Learned counsel for the petitioner states that the order passed under Section 148A(d) of the Act and the notice issued under Section 148A(b) of the Act are on distinct and separate grounds. In support of his contention, he refers to and relies upon the notice dated 21st May 2022 issued under Section 148A(b) of the Act as well as the order dated 29th July, 2022 passed under Section 148A(d) of the Act, wherein it has been stated as under:
A) Notice dated 21st May, 2022
"As per information received from ITO Ward 35(1) it is found that the assessee has sold the property
The details of the financial transactions with respect the sale of property are as udder:
| S. No. | Address of Property sold | Name of the buyer | Sale consideration | Circle Rate | Date of sale |
| 1. | 1804,2nd Floor Outram Lane, Kingsway Camp, Delhi | Usha Rani Girdhar | 35,00,000/- | 12,50,000/- | 7.12.2016 |
As per information, it is found that the assessee has sold a property for the consideration of Rs. 35,00,000/-, however, circle rate cost of the property was Rs. 12,50,000/-. It is found that assessee has filed her ITR for the A.Y 2017-18 declaring income of Rs. 3,47,281/-whereas as per ITR the assessee has not declared the capital gain income on sale of above property. As per the stamp duty authority the value of the property sold by the assessee was of Rs. 12,50,000/-whereas the purchaser paid as per sale deed a consideration of Rs. 35,00,000/-.
B) Order dated 29th July, 2022
"4.
.......The gist of information provided to the assessee is as under:
"As per information received from ITO Ward 35(1) it is found that the assessee has sold the property
The details of the financial transactions with respect the sale of property are as udder:
| S. No. | Address of property Sold | Name of the buyer | Sale consideration | Circle Rate | Date of sale |
| 1. | House No. C-1/1969, Rohini Sector-34, Delhi | Usha Rani Girdhar | Rs.10,00,000/- | Rs. 22,50,000/- | 7.12.2016 |
As per information, it is found that the assessee has sold a property for the consideration of Rs. 10,00,000/-, however, circle rate cost of the property was Rs. 22,50,000/-. It is found that assessee has filed her ITR for the A.Y 2017-18 declaring income of Rs. 3,47,281/-whereas as per ITR the assessee has not declared the capital gain income on sale of above property. As per the stamp duty authority the value of the property sold by the assessee was of Rs. 22,50,000/-whereas the purchaser paid as per sale deed a consideration of Rs. 10,00,000/-......."
3. He further states that the impugned proceedings for the Assessment Year 2017-18 are barred by limitation in terms of Section 149(1)(b) of the Act as the income alleged to have escaped assessment is Rs. 11,25,000/-i.e. less than Rs. 50,00,000 despite the fact that in terms of Section 149(1)(b) of the Act, proceedings can be initiated after expiry of three years from end of relevant assessment year only if, inter-alia, the amount alleged to have escaped assessment is Rs. 50,00,000/-or more.
4. Issue notice. Mr. Zoheb Hossain, learned senior standing counsel accepts notice on behalf of the respondents-revenue. He states that there has been a mistake in Section 148A(b) notice that was issued in the present instance. He states that the mistake has occurred as incomplete informat
