Question And Answer
Subject: Reassessment proceedings U/SEc.148 on the basis of invalid IDS declaration
Querist: Ruchi Bhansali
Answered by: , ,
Tags: ,
Date: January 25, 2022
Query asked by Ruchi Bhansali

Assessee is partnership firm engaged in the business of construction.  assessee firm has filed the declaration under IDS for A.Y. 2015-16 and 2016-17 in respect of Income earned during the relevant A.Y. .In the said declaration assessee firm has claimed the credit for payment of advance tax paid prior , however the PCIT has not allowed the credit and considered the IDS declaration as invalid . The assessee firm has filed the WP against denial of credit of advance tax in IDS declaration and the  same is pending before the HC.

AO has issued the Notice U/SEc. 148 on 30.06.2021 on the ground assessee firm has not paid the taxes under the IDS declaration and therefore the income disclosed in the IDS for A.Y. 2015-16 and 2016-17, there is under assessment of income of both the years in A.Y. 2017-18.

whether the action of AO for reopening the  the assessment for A.Y 2017-18 and considering the income disclosed in IDS for A.Y 2015-16 and A.Y 2016-17 , for which the PCIT has considered as invalid due to denial of credit for payment of advance tax is justified ? Please Guide

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The issue of credit for payment of advance tax paid earlier is subject of matter of writ pending before High Court . One has to read the recorded reasons for reassessment . If the recorded reason is for failure to pay the tax as per declaration or based on the IDS declaration . The assessee should file detailed objection . After disposal of objection the assessee should file writ before the High Court . As the earlier writ is pending the Court may admit the writ petition and stay the proceedings and may dispose of both the writ petition together . On the facts the notice being issued u/s 148 on 30 -6 -20021 , the asssessee can challenge the issue of notice by filing writ petition as the mandate of section 148A was not followed . Refer Bipip Infra Pvt Ltd and Ors v. ACIT and Ors . ( Raj ) (HC) www.itatonlline .org , Ashok Kumar Agarwal & Ors v. UOI ( 2021 ) 206 DTR 229 / 322 CTR 873/ 131 22 ( All ) ( HC) .www.itatonline .org . Mon Mohan Kohli v. ACIT [2021] 133 166 ( Delhi ) (HC) ,Tata Communications Transformation Services Ltd v. UOI (2021) 281 taxman 222 (Bom.) (HC), Sahil International v. ACIT (2021) 281 Taxman 221 (Bom.) ( HC)

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