Law:

Section:

Section 148 of the Income-tax Act, 1961 - Income escaping assessment - Issue of notice for - Assessment year 1999-2000 - Whether having regard to wide powers available under section 148, very initiation of proceedings made under said section by issuing notice cannot be held to be invalid merely because ultimate order of assessment is best assessment falling within section 144; in such case, assessee, at best, can only claim an opportunity of hearing - Held, yes Section 48 of the Income-tax Act, 1961 - Capital gains - Computation of - Assessment year 1999-2000 - Assessee had not filed return for relevant assessment year - Assessing Officer, realizing that certain capital gain chargeable to tax had escaped assessment, initiated proceedings under section 147 and called upon assessee to submit her objections on or before 11-12-2006 - In her reply, dated 9-12-2006, assessee claimed that for computing capital gain, consideration received for transfer of property should be reduced by expenditure incurred by her for rectifying defects in title to property and removing encumbrance to transfer - Unfortunately, said reply was submitted to Assessing Officer only on 13-12-2006, i.e., after order of assessment, dated 12-12-2006 and, therefore, could not be considered by Assessing Officer - Whether question, whether expenses alleged to have been incurred by assessee in order to get property free from so-called legal entanglement were to be deducted for determining tax liability of assessee, was purely a question of law and, therefore, assessee should be given an opportunity to explain her stand - Held, yes FACTS The assessee did not file the return for the assessment year 1999-2000. In the letter, dated 10-12-2002, where the subject-matter related to the non-filing of the return for the assessment year 2001-02, the assessing authority called upon the assessee to furnish the details regarding the returns filed by the assessee for the assessment years 1999-2000, 2000-01 and 2002-03 to enable him to update the records of the assessee. The assessing authority also realized that certain capital gain chargeable to tax had escaped assessment and, therefore, initiated proceedings…

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