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Introduction: After a surge in notices under Section 133(6) of the Income Tax Act, 1961, the focus has shifted to Section 148A/148. This article delves into a recent case where incorrect SFT reporting led to a U/s 148A notice.

After the flood of notices issued in Section 133(6) of the Income Tax Act, 1961 now department is focusing on issuing notices U/s 148A / 148 of the Income Tax Act, 1961, to catch the tax evaders and to recover taxes from them. In today’s article, we will discuss about a recent case where wrong SFT reporting done by SFT reporter has triggered notice U/s 148A of the Income Tax Act, 1961.

Section 148 of the Income Tax Act 1961 empowers the Assessing Officer to issue a notice to a taxpayer whose income has escaped assessment. This means that if the Assessing Officer believes that a taxpayer has not disclosed their full income or has underreported it, they can initiate proceedings under this section.

A notice under Section 148 can be issued to a taxpayer within 3 years from the end of the relevant assessment year, If the escaped assessment amounts to or likely to amounts to less than Rs. 50,00,000. However, if the escaped income is Rs. 50,00,000 or more, the notice can be issued within ten years from the end of the relevant assessment year.

As per process, before issuing notice U/s 148 of the Income Tax 1961, the officer has to issue show cause notice U/s 148A of the Income Tax Act, 1961, asking the reply from Assessee, why the notice U/s 148 of the Income Tax Act, 1961 should not be issued for further proceedings.

Let’s discuss the case, here a joint property was purchased for a value of Rs.33,00,000/- 5 years back with 50-50% sharing between Mother and Son and both paid there considerations by their respective bank accounts. As we all know, sale or purchase of property exceeding Rs.30,00,000/- are covered under SFT Provisions, to be reported by registrar. Here, while filing SFT Reports due care is not taken by registrar office and they have reported purchase of property details in both accounts of mother and Son against their PAN Number amounting to Rs.33,00,000/- each which should be Rs.16,50,000/- each.

Further, here false reporting is also done by registrar where they have reported Rs.43,00,000/- property details related to someone else but they have shown Rs.43,00,000/- extra property purchase details in their account. If we add both reporting then it amount to Rs.76,00,000/- in each account and it triggers the Sections 148A of the Income Tax Act, 1961 notice due to wrong reporting by registrar. Here, the assessee has to prove that their property value is less than Rs.50,00,000/- and provisions related to Section 148/ 148A of the Income Tax Act, 1961 are not applicable on them. Here strong reply needs to submit with officer otherwise it will create problem for the assesee.

Conclusion: The case underscores the importance of meticulous SFT reporting. Regularly reviewing AIS/TIS reports and challenging discrepancies promptly can prevent future issues. Taxpayers should remain vigilant to avoid unnecessary hassles.

Author’s Note: To avoid such kind of situation, we must visit our AIS/ TIS reports regularly and must object such transactions to avoid hassle at later stage.

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Disclaimer: This article is for the purpose of information and shall not be treated as solicitation in any manner and for any other purpose whatsoever. It shall not be used as legal opinion and not to be used for rendering any professional advice. The author will not be held responsible for any lose, if occur after using above information. Kindly consult your professionals before taking any action. This article is written on the basis of author’s personal experience and provision applicable as on date of writing of this article. Adequate attention has been given to avoid any clerical/arithmetical error, however; if it still persists kindly intimate us to avoid such error for the benefits of others readers. The Author “CA Shiv Kumar Sharma” can be reached at mail –shivsharma786@gmail.com and Mobile/WhatsApp–9911303737.

Author Bio

My Self CA. Shiv Kumar Sharma. I am a member of "The Institute of Chartered Accountants of India" since 2012. Currently, I am in Practice and dealing in Direct and Indirect taxation along with ROC Compliances. I am writing Articles for Taxguru.in, casansaar.com and in the expert panel of ca View Full Profile

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