Capital Property Consultants Vs ACIT (Delhi High Court)
In Capital Property Consultants Vs ACIT, the Delhi High Court dealt with the issuance of multiple notices under Section 148A(b) of the Income Tax Act, 1961, highlighting procedural lapses by the Assessing Officer (AO). The case revolved around two notices issued for Assessment Year (AY) 2020-21. The first notice, dated March 31, 2024, alleged income escapement based on a property agreement involving facilitation services provided by the petitioner. The petitioner responded, asserting that the agreement was never acted upon and submitted confirmation letters from the parties to that effect. The AO appeared to accept this but later issued a second notice on April 18, 2024, citing unrelated commission income based on new information from the Insight Portal.
The petitioner contested the validity of the second notice, arguing it was independent of the first and not supplemental. The court examined whether the second notice could be considered a continuation of the first or required independent compliance with statutory provisions, including time limits and monetary thresholds outlined in Section 149. It noted that the second notice dealt with different information and was not linked to the initial transaction described in the first notice.
The court ruled that the second notice could not be supplemental to the first, as it raised entirely new issues. Thus, it was treated as an independent notice requiring compliance with the statutory conditions under Section 149. Since the second notice failed to meet these conditions, the court quashed it. This decision reinforces that every Section 148A(b) notice must independently satisfy the procedural and substantive requirements of the Act, even if they involve the same assessment year.
