Prakhar Tandon Vs Assessing Officer (Allahabad High Court)
The Allahabad High Court allowed a writ petition challenging a notice issued under Section 148 of the Income Tax Act, 1961, an order rejecting objections to the notice, and the consequent reassessment proceedings. The petitioner contended that the reopening of assessment for Assessment Year 2013-14 was based on an incorrect assumption that he had sold an immovable property and earned capital gains of ₹26,02,150, which had allegedly escaped assessment. The petitioner consistently maintained that no such property had been sold during the relevant financial year and that the recorded reasons were based on conjectures and unsupported assumptions.
The Assessing Officer issued the notice under Section 148 relying on information available on the INSIGHT Portal, which allegedly indicated that the petitioner had earned capital gains from the sale of immovable property. The petitioner objected to the reopening, asserting that the information was factually incorrect and that there was no basis to believe that income had escaped assessment. However, the objections were rejected on the ground that the information received from the INSIGHT Portal constituted sufficient material to form a prima facie belief of escaped income.
Subsequently, the Assessing Officer prepared a draft reassessment order and later passed a reassessment order under Sections 147, 144, and 144B of the Act. Significantly, the reassessment order did not proceed on the basis of the alleged sale of property and capital gains mentioned in the reopening notice. Instead, it adopted an entirely different basis by alleging that the petitioner had purchased an immovable property for ₹10,00,000 during the relevant assessment year and, after adjusting the income disclosed in the return, added ₹9,17,990 to the petitioner’s income under Section 69. The Court noted that this complete shift in the basis of reassessment demonstrated that the original reasons for reopening lacked factual foundation.
