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Constitutionality Of First Proviso To Section 148 Of Income Tax Act, Rajasthan High Court Issues Notice To Govt.

Mariya Paliwala
27 May 2022 7:00 AM GMT
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The Rajasthan High Court bench headed by Acting Chief Justice Manindra Mohan Shrivastava and Justice Sameer Jain has issued the notice to the government on a plea challenging the validity of the first proviso to section 148 of the Income Tax Act by granting arbitrary powers to the AO.

The petitioner/assessee has filed this Writ Petition under Article 226 of the Constitution of India challenging the notice issued under clause (b) of Section 148A of the Income Tax Act, 1961.

Firstly, on the grounds that, without conducting preliminary enquiry, which is a pre-requisite for the application under Section 148A of the Income Tax Act, 1961.

Secondly, the reply of the petitioner has not been considered by the Assessing Officer in respect of the issuance of notice under Section 148.

Lastly, the provisio to Section 148 of the Act of 1961 was challenged because it has diluted the standard of test required on behalf of the Assessing Officer before issuing a notice under Section 148 of the Act of 1961. Section 148 vests the Assessing Officer with arbitrary powers to open assessments.

The petitioner submitted that the Assessing Officer in the notice under clause (b) of Section 148A of the Income Tax Act alleged that, based upon the information, the petitioner had traded in crypto currency amounting to Rs. 29,17,088. The Assessing Officer has further assumed that the petitioner has earned some income on the alleged traded value. The Assessing Officer has further stated that the petitioner has not declared the income in her return of income.

The petitioner has assailed the first provision of Section 148 of the Income Tax Act, 1961, on the ground that the explanation "income chargeable to tax has escaped assessment" has been restricted in its meaning.

The court, while listing the matter on 04.07.2022, has stayed the reassessment notice.

Case Title: Maya Rathi Versus ITO

Citation: D.B. Civil Writ Petition No. 7495/2022

Dated: 23/05/2022

Counsel For Petitioner: Advocate Vedant Agrawal

Counsel For Respondent: ASG R.D. Rastogi

Click Here To Read/Download Order

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