Section 148 of the Income Tax Act
According to Section 148 of the Income Tax Act, if an individual’s taxable income has eluded assessment by the IT department, an Assessing Officer will issue a notice requiring them to provide the appropriate papers to verify that they are tax compliant.
The time restriction for issuing notice under Section 148 of the Act was extended to June 30, 2021, by Notification No. 38 of 2021.
Proceedings U/S 148A can be dropped, only after the submission of adequate documentary evidence: ITAT
- The Directorate of Income-Tax(Systems) received information that the Assessee made an investment of Rs.4,65,72,546/- in the acquisition of Cryptocurrency but did not report it, and so a notification was issued under Section 148A.
- The assessee responded that the sum alleged in the notice merely reflects the volume of transactions in the process of trading Cryptocurrency, not the purported investment amount. Bank statements displaying transfers made in exchange for Cryptocurrency were also provided.
- However, the AO was not satisfied because the assessee’s contention was not supported by adequate documentary evidence, particularly a ledger account relating to Cryptocurrency, resulting in an order under Section 148A(d) of the IT Act and the issuance of a notice under Section 148 for the reopening of assessments.
Subclause (d) of Section 148A of the Act of 1961 states that the Assessing Officer must consider whether or not to issue a notice under Section 148A based on the material on record, including the assessee’s response.
Read More: 194R- TDS Clarifications on Perquisites & Additional Guidelines by CBDT
ITAT Jaipur held as below:
- The exercise carried out by the authority satisfied the legal criteria of Section 148. (A).
- There is no reason to interfere with the order because it is neither perverse nor lacks jurisdiction to necessitate intervention by this court in the exercise of writ jurisdiction.
- The petition is consequently rejected, subject to the petitioner’s right to provide appropriate documentary evidence in support of information in Section 148 proceedings.