Reopening u/s 148 where properties sold illegally and assessee did not received sale consideration

Reopening u/s 148 where properties sold illegally and assessee did not received any sale consideration-High Court declines to interfere in view of the alternative remedy available to assessee

ABCAUS Case Law Citation:
ABCAUS 2610 (2018) (11) HC

Important Case Laws Cited/relied upon:
Commissioner of Income Tax and others Vs. Chhabil Dass Agarwal (2013 357 ITR 357 (SC)

The Petitioner assessee had filed a Writ Petition before the Hon’ble High Court against the notice of reopening and his objections to the issuance of notice u/s 148 of the Income Tax Act, 1961 (the Act).

The petitioner was served with the above notice under Section 148 of the Act for the purpose of reassessment. The petitioner filed objections to the reopening which were rejected by the Assessing Officer (AO) vide impugned order.

The petitioner submitted that he was a Karta of the joint family and that he had authorised one of his family members to transfer one of the properties of the HUF, but instead he illegally transferred the property in question.

The petitioner stated that he had not received any sale consideration in respect of the said property and that he had immediately filed a suit for the cancellation of the sale deed which was pending adjudication in the civil court.

The submission of the petitioner was that he could not be saddled with any liability of capital gains which may authorise reassessment on that ground. 

The Hon’ble High Court opined that the question whether the power of attorney given by the petitioner was misused or was illegally utilised by the family member and whether the petitioner had received any sale consideration or not or any other such ancillary issues were all questions of fact which could not be adjudicated in these proceedings but have to be adjudicated upon if at all in the civil suit which is said to be pending. 

The Hon’ble High Court opined that in view of the aforesaid facts and circumstances, the assessment proceedings would not cause any prejudice to the petitioner and that the petitioner would have an opportunity to challenge the reassessment, if any in appeal, as provided under the provisions of the Act.

The Hon’ble High Court stated that in the said appeal, it will be open for the assessee to question the jurisdiction aspect of the matter as well.

Therefore the Hon’ble High Court declined to exercise its extraordinary jurisdiction in the matter in view of the alternative remedy available to the petitioner.

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