BENGALURU: The Karnataka High Court has quashed an assessment notice issued by the Income Tax Department to Jitendra Virwani, Chairman and Managing Director of Embassy Group, under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, saying that the impugned notice requires re-examination by the authorities.
A division bench of Justice PS Dinesh Kumar and Justice MG Uma quashed the notice dated August 11, 2021, issued by the Joint Commissioner of Income Tax while allowing the appeal filed by Virwani challenging the order dated July 22, 2022, passed by the single judge, who dismissed the petition against the notice while reserving liberty to take appropriate defence before the assessing officer.
Modifying the single judge’s order, the division bench reserved the liberty to the Income Tax Department to issue fresh notice, if so advised, in accordance with law after reconsideration concerning the order passed by the Income Tax Appellate Tribunal (ITAT) on July 30, 2021.
“The authority under the Act has alleged several transactions listed therein as illegal transactions. This court cannot examine all allegations/transactions in this proceeding. But the two transactions examined by us clearly show that Income Tax Department has sent information without proper verification and the authorities under the BM Act have acted mechanically and sent the impugned notice without application of mind,” the court observed.