Delhi High Court Quashed Reassessment Notice: Whether Notice Issued to an Individual or Corporate Entity Must be Clearly Stated by the AO

Delhi High Court Quashed Reassessment Notice: Whether Notice Issued to an Individual or Corporate Entity Must be Clearly Stated by the AO

The Delhi High Court by its coram comprising of Justices Rajiv Shakdher and Girish Kathpalia while quashing the reassessment notice for non-application of mind by the department noted that the Assessing Officer (AO) was completely unclear whether he was issuing notice to an individual or a corporate entity.

In the instant case, the petitioner had challenged the notice issued under Section 148A(b) of the Income Tax Act, 1961.

The petitioner argued that the allegation concerned investment in shares without material on record, which would constitute income chargeable to tax and had escaped assessment.

The petitioner stated that the notice sought a copy of the passport reflecting travel details. The petitioner, i.e., the noticee, claimed to be a company, therefore, this information could not have been sought from it. The Assessing Officer (AO) had also asked for a tax residency certificate.

The court noted that the AO was completely unclear whether he was issuing notice to an individual or a corporate entity.

The bench while remitted the matter to the AO to conduct a de novo exercise.

Furthermore, the Court directed the AO to recommence the proceeding if deemed necessary after gathering the relevant material that would show that income chargeable to tax had escaped assessment by the petitioner.

Accordingly, the impugned notice and order were set aside.