Notice issued u/s 148 of Income Tax

[vishwanath shetty]

A notice u/s 148 was issued as the assessee had not filed the ITR but there was purchase of property in SFT-12. Before this notice no other notice or SCN was issue.

After notice u/s 148, notice u/s 142(1) and SCN u/s 144 was also issued. Since the email and phone no mentioned on the portal were discontinued a long time ago. Assesse was not aware of any of this notices. After receiving a hardcopy for penalty proceedings all the facts regarding, previous notice came to light.

I am not sure is the notice issued u/s 148 valid as no SCN u/s 148A was issued prior to it. Should we proceed with filing of appeal, giving all the classification of investment of property or fight that the notice is invalid?

[Sanjeev Agarwal]

Based on the facts provided, do not rely solely on the technical ground that the notice under section 148 is invalid. Instead, challenge the reassessment on both jurisdictional and factual grounds.

If the notice under section 148 was issued after 1 April 2021, the Assessing Officer is ordinarily required to follow the procedure under section 148A before issuing a notice under section 148, unless the case falls within one of the statutory exceptions (such as specified search/requisition cases). A reassessment based solely on SFT information relating to purchase of immovable property would, prima facie, not fall within those exceptions. Therefore, if no notice under section 148A(b) and no order under section 148A(d) were issued, the validity of the reassessment can be challenged.

However, first verify the assessment records. It is possible that notices under section 148A were uploaded on the Income-tax portal and treated as electronically served. Download the complete notice history, DIN-wise communications, and assessment records before taking this ground. Also verify the mode of service and whether statutory requirements for service were complied with. The fact that the registered email ID and mobile number had become inactive may support a plea of lack of effective opportunity, but it does not automatically invalidate service if the Department has complied with the prescribed procedure.

Irrespective of the jurisdictional challenge, do not ignore the merits. Explain the complete source of investment in the property with supporting evidence such as bank statements, savings, sale proceeds, loans, gifts, inheritance, or other documentary proof. If the jurisdictional ground fails, a well-supported explanation on merits may still succeed.

Accordingly, the recommended strategy is to:

1. Verify whether proceedings under section 148A were actually conducted.
2. Challenge the validity of the reassessment if section 148A was not followed (where applicable).
3. Simultaneously contest the addition on merits by substantiating the source of investment.
4. Raise both jurisdictional and factual grounds in appeal rather than relying exclusively on a procedural defect.

AI Summary

Reassessment notice under section 148 can be challenged for non-compliance with section 148A, while also substantiating property investment sources.
A reassessment notice under section 148 based on property purchase information may be challenged where the pre-notice procedure under section 148A was not followed. The assessee should verify the assessment records, notice history, DIN-based communications, and service details before relying on the jurisdictional objection. In parallel, the source of investment in the property should be substantiated with supporting evidence, and both jurisdictional and factual grounds should be raised together in appeal.