Order set aside under section 148A(d); AO directed to reexamine transactions de novo and furnish 285BA(1) breakup

HC set aside the order u/s 148A(d) and the consequential notice u/s 148 and directed the AO to reexamine the transactions de novo in light of the taxpayer's explanations. The taxpayer, a Canadian resident who stayed in India 31 days, had explained remittances as bank interest and reinvestment in NRO/NRE FDRs and sought a detailed break-up of a third high-value transaction. The AO is directed to consider the submitted material and to furnish the break-up of specified high-value transactions allegedly reportable under s.285BA(1) before proceeding further.

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Issues involved:
The legal judgment concerns a writ petition filed for Assessment Year (AY) 2019-20 challenging an order passed under Section 148A(d) of the Income Tax Act, 1961, along with a consequential notice issued under Section 148 of the Act.

Details of the judgment:

1. The petitioner, a resident of Canada, was in India for 31 days during the relevant AY but did not file a return, claiming that his income was below the threshold for filing. The Assessing Officer (AO) flagged transactions totaling Rs. 4,10,30,719 based on information from the Insight Portal.

2. The petitioner responded to the notice, explaining transactions flagged by the AO, including interest earned on bank deposits, time deposits, and a statement of reportable account. The petitioner maintained that the interest earned was reinvested in bank deposits and had no other income sources.

3. The AO did not fully consider the petitioner's response, prompting the Court to set aside the order dated 15.04.2023 and the consequential notice dated 16.04.2023. The AO was directed to reexamine the matter, provide a detailed break-up of the high-value transactions, and accord a personal hearing to the petitioner or his representative.

4. Before proceeding further, the AO must furnish a break-up of the specified transactions amounting to Rs. 2,79,87,633 that the petitioner was required to report under Section 285BA(1) of the Act. The writ petition was disposed of accordingly, with pending applications closed.

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