Income tax

Cal HC rescinds Department of Income Tax notice to TMC

Kolkata: The High Court in Calcutta on Monday quashed an order from the Income Tax Department and a subsequent notice to the Trinamool Congress (TMC) regarding alleged anomalies in the income of Bengal’s ruling party for the year of 2018-19 evaluation.

The court said there was a violation of the principles of natural justice because the valuation agent did not provide a breakdown of the amount on the basis of which the relevant agent arrived at the figure which would have escaped the declaration of political party income for that period.

Judge Md Nizamuddin rescinded the IT Department order dated April 25, 2022 and subsequent notice to the TMC and remitted the matter to the Valuation Officer to make a new order after providing the apportionment of the amount in question by bank account.

He also ordered the officer to issue a new order after giving the opportunity to hear the petitioner or his authorized representative.

“I am of the view that there was a breach of the principles of natural justice by the valuation agent in failing to provide a breakdown for the amounts on the basis of which the valuation agent arrived at the amount figure which would have been escaped from the income mentioned in the appendix,” the bench observed.

The TMC challenged the IT department’s order for the 2018-19 tax year on the grounds of violating the principles of natural justice.

The TMC argued that the IT department issued a notice with an appendix to the part stating that “income of Rs 5,16,78,114 shown in the IT statement includes interest income of Rs 90,01,811 (which) were not part of the filings and stated that an amount of Rs 1,71,95,092 was not disclosed in the ITR filed for the valuation year 2018-19.” The party said it was asked to give an answer to the same.

The schedule listed 18 account numbers and bank names, but it did not mention the branch or the breakdown of the amount in each of those accounts, the TMC said.