Ankit Agarwal son of Shri Ganesh Agarwal Vs Principal Chief Commissioner of Income Tax (Patna High Court)
The Patna High Court allowed the writ petition filed by Ankit Agarwal challenging reassessment proceedings for Assessment Year 2015-16. The petitioner had filed his income tax return, disclosed his income, claimed exemption on long-term capital gains arising from sale of shares, and submitted audited accounts. Despite this, the Department issued a notice under Section 148A(b) alleging that the petitioner had not filed his return and had escaped assessment based on information received from the Insight Portal. The petitioner contended that the reassessment proceedings were initiated on an incorrect premise, that the notice relied upon false information describing him as a non-filer, that the Department sought to invoke the extended limitation period by inflating the alleged escaped income, and that no supporting material was supplied along with the notice. During the reassessment proceedings, the Department questioned the genuineness of the petitioner’s claim of exempt long-term capital gains on the sale of shares and ultimately passed an assessment order raising a tax demand.
The Department defended the reassessment by stating that notice under Section 148A(b) had been issued with prior approval, that adequate opportunity had been provided to the petitioner, and that the reassessment proceedings complied with the statutory procedure. It also argued that the notice was issued within the prescribed limitation after excluding the period allowed for responding to the show-cause notice. During the hearing, however, the Department acknowledged that the first paragraph of the annexure to the notice appeared to be incorrect and suggested that the error may have resulted from a cut-and-paste mistake while preparing the notice.
