Section 148A(d) notice quashed for lacking specific reference to guideline value difference in property purchase

The Madras HC quashed a Section 148A(d) notice issued based on information from the Insight Portal regarding property purchase below guideline value. The court held that the show cause notice lacked specific reference to the difference between guideline value and sale consideration, making it impossible for the assessee to provide adequate explanation. The assessment order failed to consider the petitioner's explanations regarding gifts from mother and home loan from Sundaram BNP Paribas. The court ruled that without proper consideration of the assessee's response, the statutory mandate becomes an empty formality, warranting interference.

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Issues Involved:
The judgment deals with a challenge against an order under Section 148A(d) of the Income Tax Act and a consequential notice under Section 148, raising concerns about the basis of information, direct link between information and income, and a finding on an issue not raised in the show cause notice.

Challenge on Basis of Information:
The petitioner contested the order issued under Section 148A(d) solely based on information from the Insight Portal, citing the Bombay High Court judgment and emphasizing the need for a direct link between the information and the alleged income escaping assessment.

Direct Link Requirement:
The petitioner argued that there was no direct link between the Insight Portal information and the alleged income, relying on a Bombay High Court judgment, which states that a direct link is essential for issuing a notice under Section 148.

Finding on Unraised Issue:
The challenge also included a finding in the impugned order regarding the difference between sale consideration and guideline value, leading to an additional assessable income under Section 56(2)(vii)(b) of the Income Tax Act. The petitioner contended that this issue was not raised in the show cause notice, depriving them of an opportunity to respond.

Response by Respondents:
The senior standing counsel for the respondents argued that the impugned order was justified, highlighting discrepancies in property values and lack of evidence for gifts received. He emphasized that the petitioner had the opportunity to respond but failed to provide satisfactory explanations.

Judicial Analysis and Decision:
The court analyzed the contentions of both parties and found that the impugned order lacked consideration of the petitioner's responses to the show cause notice. It concluded that the order should be quashed due to raising an unnotified issue. The court directed the issuance of a fresh show cause notice, ensuring all relevant issues are addressed within three months.

Conclusion:
The writ petition was disposed of with directions for a fresh show cause notice, emphasizing the importance of considering the petitioner's responses before issuing further orders. The connected miscellaneous petitions were closed, and no costs were awarded in the matter.

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