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| HC quashes IT notice to Madras CJ's wife | | | Early Times Report
jammu, July 26: In a petition filed by Kanwarani Shivani Koul, wife of Madras high court Chief Justice Sanjay Kishan Kaul, seeking quashment of notice issued to her under section 148 of the Income Tax (IT) Act, 1961, a high court division bench of first puisine judge Ramalingam Sudhakar and Justice B S Walia today quashed the impugned notice as also the consequential proceedings.
Shivani had sought its quashment on the ground that the notice initiating reassessment proceedings was ex-facie bad in law and further prayer was made to restrain the respondents from passing an order of reassessment for 2008-09.
The petitioner was issued notice on October 1, 2010 under section 142(1) of the Act along with a detailed questionnaire, seeking details on various aspects on her tax liability. On October 25, 2010, she filed a response to the notice.
The bench, after hearing both the sides, observed that the reasons recorded by the officer for initiating proceedings under section 148 of the Act, as had already been recorded earlier, related to sale of agricultural land held by her as co-owner with her spouse. 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, but it was the audit party that had raised objection. Despite repeated opportunities having been given, no records were produced and the department did not file objections stating that the said order of the Commissioner of Income Tax (Appeals) had been modified or reversed. In other words, it was apparent that the department has accepted the sale of the agricultural land insofar as spouse of the petitioner was concerned and the transaction was common to both of them, the bench observed.
There could not be two yardsticks in respect of common transaction of sale, treating one component of the sale as agricultural land and the other component for non-agricultural purposes, the bench said.
The bench said it was evident from the reasons for initiating proceeding under section 148 of the Act that merely because the land was sold to a particular person, the authority had taken a view that it had been sold for non-agricultural purposes. "In our opinion, that reason appears to be a fallacy. What is the nature of the land at the time it was sold will be relevant. Future use is not the concern of the petitioner," the bench said.
"It can be safely inferred that the department has proceeded on a wrong premise that the business being carried on by the purchaser of the land would be relevant in deciding the nature of the land sold. In our opinion, such a view is perverse and totally untenable in law and the audit objection does not appear to be based on any tangible material requiring case for reassessment. On the contrary, it appears to be a mere change of opinion. Despite detailed objections having been submitted, the authority has not chosen to pass a speaking order. Initiation of reassessment proceedings on the basis of audit objection is also to be faulted without there being any fresh or tangible material placed on record to suggest that income has escaped assessment," the bench said.
While allowing the petition, the bench quashed the impugned IT notice. (JNF) |
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