*DB quashes Income Tax notice
Excelsior Correspondent
JAMMU, July 26: Wife of Chief Justice of Madras High Court has obtained relief from the J&K High Court in a notice issued by the Income Tax Department.
Kanwarani Shivani Koul, wife of Sanjay Kishan Kaul, Chief Justice of Madras High Court had filed a petition seeking quashment of notice issued under Section 148 of the Income Tax Act, 1961 on the ground that the notice initiating re-assessment proceedings is ex-facie bad in law. She had prayed for restraining the respondents from passing order of reassessment for the assessment year 2008-09.
After hearing Senior Advocate D C Raina assisted by Advocate Manik Mahey for the petitioner whereas Advocate Aruna Thakur appearing for the Income Tax Department, Division Bench of High Court comprising First Puisine Judge Justice Ramalingam Sudhakar and Justice B S Walia quashed the impugned notice as also the consequential proceedings.
The case of the petitioner was that on October 1, 2010 a notice under Section 142(1) of the Income Tax Act was issued by the respondents along with a detailed questionnaire seeking details on various aspects on the tax liability of the petitioner.
On October 25, 2010, petitioner filed response to the notice. Thereafter, on December 9, 2010 an order in terms of Section 143(3) of the Act was passed by the respondents after considering the Return of Income filed and the submissions made at the time of hearing.
In the proceedings dated December 9, 2010, the authority held that during the course of the assessment proceedings, nothing adverse has been noticed, as such the Return of Income filed by the assessee was accepted.
“The reasons recorded by the officer for initiating proceedings under Section 148 of the Act, as has already been recorded earlier, relates to sale of agricultural land held by the petitioner as co-owner with her spouse, which land was sold by both of them in a single transaction. Consequent to the sale in relation to assessment year 2008-09 in respect of the petitioner, the department accepted the same in the original assessment proceedings. It is the audit party that has raised the objection. On the contrary, in the case of the spouse, it is on record that the Commissioner of Income Tax (Appeals) has finally held that the property sold should be treated only as agricultural land and rejected the department’s contention”, the DB observed.
“Despite repeated opportunities having been given, no records were produced and the department has not filed objections stating that the order of the Commissioner of Income Tax (Appeals) has been modified or reversed. In other words, it is apparent that the department has accepted the sale of the agricultural land insofar as spouse of the petitioner is concerned and the transaction is common to both the spouses”, the DB further said, adding “there cannot be two yardsticks in respect of common transaction of sale, treating one component of the sale as agricultural land and the other component of the sale for non-agricultural purposes”.
Division Bench while allowing the petition quashed the impugned notice.
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