1998 (7) TMI 47 - HC - Income Tax

Summary

Issues Involved:
1. Quashing of exhibits P-2 and P-4 under section 158BD of the Income-tax Act, 1961.
2. Transfer of the petitioner's case from her Assessing Officer to her husband's Assessing Officer.
3. Challenge to the pre-assessment notice exhibit P-4.

Transfer of Case:
The petitioner sought quashing of exhibits P-2 and P-4, which included a notice under section 158BD of the Income-tax Act, 1961, and a pre-assessment notice. The petitioner's case was transferred from her Assessing Officer to her husband's Assessing Officer, both located in the same town. The petitioner contended that she should have been given an opportunity before the transfer. However, section 127(3) of the Act exempts the requirement of giving an opportunity in cases where the transfer is between Assessing Officers situated in the same city. As both Assessing Officers were in the same city, the transfer did not necessitate a prior notice to the petitioner.

Challenge to Pre-assessment Notice:
The challenge also involved the pre-assessment notice exhibit P-4, which the petitioner argued referred to her husband's disclosed income, not her undisclosed income. It was found during a search operation that the petitioner possessed undisclosed income, justifying the notice issued under section 158BD of the Act. The court noted that the notice was not without jurisdiction or illegal based on the discovered undisclosed income of the petitioner.

Judgment:
The court dismissed the appeal, ruling that the transfer of the petitioner's case to her husband's Assessing Officer in the same city did not require prior notice to the petitioner. Additionally, the pre-assessment notice exhibit P-4, issued based on the petitioner's undisclosed income, was deemed valid and not illegal.