Prakash Kumar Chandnani Vs DCIT (Rajasthan High Court)
Rajasthan High Court has dismissed a petition filed by Prakash Kumar Chandnani, affirming the Assessing Officer’s (AO) decision to initiate reassessment proceedings under Section 148A(d) of the Income Tax Act, 1961. The court ruled that reassessment is justified when the source of investments, including contributions claimed from a mother, remains doubtful and inadequately explained. This decision underscores the limited scope of judicial review in reassessment initiation stages, emphasizing that detailed factual examinations are the prerogative of the Assessing Officer, not the writ court.
The case revolves around an initial reassessment notice issued to Prakash Kumar Chandnani for Assessment Year 2016-17. The petitioner had not filed a return of income for that year, but information regarding transactions totaling Rs. 87,44,278/- prompted the income tax authorities to initiate reopening proceedings.
In the first round of litigation, the Rajasthan High Court intervened and set aside a prior order under Section 148A(d) because the petitioner’s reply had not been considered. The court’s order dated October 7, 2024, granted the department liberty to consider the petitioner’s detailed response filed on March 17, 2023, and make an appropriate decision.
Following this, the AO reconsidered the petitioner’s reply, leading to the impugned order that was challenged in the current petition. The petitioner’s primary contention was that despite not filing a return, he had adequately explained the source of the investment. Specifically, he argued that an immovable property purchase, which was a significant part of the unexplained transaction amount, was a joint acquisition with his mother, Mrs. Shanta Chandru Chandnani. Therefore, he contended that he was only responsible for explaining his portion of the investment, not the amount contributed by his mother.
