R.S. Darshan Singh Motor Car Finance Pvt. Ltd. Vs ITO (ITAT Kolkata)
The case of R.S. Darshan Singh Motor Car Finance Pvt. Ltd. vs. ITO, handled by the Income Tax Appellate Tribunal (ITAT) Kolkata, brings forth significant insights into the procedures and responsibilities of the Assessing Officer (AO) under the Indian Income Tax Act. The tribunal’s decision to quash the notice issued under Section 148 of the Income Tax Act underscores the necessity for thorough verification of information by the AO before initiating any reassessment proceedings.
Background of the Case
R.S. Darshan Singh Motor Car Finance Pvt. Ltd., a non-banking financial company, filed its return of income for the financial year 2012-13, declaring an income of Rs. 49,140. This return was processed under Section 143(1) of the Income Tax Act. However, on March 19, 2020, the AO issued a notice under Section 148, initiating a reassessment process based on information alleging that the company received Rs. 35,00,000 from M/s Brahma Tradelinks Pvt. Ltd., a shell company.
Proceedings and Arguments
The company contested the notice, asserting that the reassessment was based on unverified and incorrect information. Specifically, they argued that the AO failed to verify the authenticity of the information before issuing the notice, thus violating procedural requirements.
