CHETAK COMPLEX vs. DEPUTY COMMISSIONER OF INCOME TAX

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CW/17547/2021HC Rajasthan14 January 2022Author: AKIL KURESHI, REKHA BORANA3 pages
AI SummaryRemanded

What did the High Court hold?

The Tribunal prima facie observed that the Assessing Officer appeared to have passed a hurried order of assessment due to advancing deadlines for completing the assessment. This haste led to the AO not recording any reasons for not accepting the petitioner's request for a reference to a valuer, as contemplated under Section 50C of the Act. The Tribunal noted that the AO disposed of the petitioner's objections on September 24, 2021, and passed the assessment order on September 30, 2021, within a short span. Consequently, the High Court stayed the order of assessment as an ad-interim relief. The specific finding on the merits of the addition or the validity of the reopening notice is not recorded as the matter is at the stage of issuing notice and granting interim relief.

What were the facts?

The petitioner, engaged in real estate development, is challenging a notice for reopening assessment for the assessment year 2015-16 and the subsequent assessment order. The original assessment was completed under Section 143(3). The Assessing Officer (AO) issued a notice to reopen the assessment on May 31, 2019. The petitioner raised objections on September 4, 2019, which were disposed of on September 24, 2021. Subsequently, on September 30, 2021, the AO passed an assessment order, making an addition of Rs. 9.51 Crores to the assessee's income with the aid of Section 43CA of the Income Tax Act, 1961.

What were the issues?

1. Whether the Assessing Officer breached the principles of natural justice by passing a hurried order of assessment within less than a week of disposing of the petitioner's objections to the reopening notice, without properly considering the petitioner's request for a reference to a valuer? Assessee's Contention: The petitioner argued that they disputed the stamp duty valuation, asserting that the market value of the property was significantly lower than the stamp duty rate and that no buyers were willing to purchase at those rates. They requested a reference to a valuer to ascertain the true market value. The AO, however, failed to accept this request or even address it, passing the assessment order in breach of natural justice. Revenue's Contention: The judgment does not record any specific contentions from the revenue regarding this issue.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 43CA,Section 50C

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
(1 of 3) [CW-17547/2021] HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Civil Writ Petition No. 17547/2021 Chetak Complex, 01, Chetak Complex, Ground Floor Dahod Road, Banswara 327001, Rajasthan Through Its Partner Ravindra Nath Bhandari S/o Ranchhod Nath Bhandari Resident Of 359, Gali No.3, Rati Talai, Banswara, Rajasthan 327001. ----Petitioner Versus 1. Deputy Commissioner Of Income Tax, Circle Chittor, Aaykar Bhawan, 1St Floor, Room No.14, Kila Road, Chittorgarh, Rajasthan, 312001 2. Income Tax Officer, Ward-1, Fort Road, Chittorgarh, Rajasthan 312001. ----Respondents For Petitioner(s) through V.C. : Mr. Prakul Khurana for Mr. Sanjay Nahar For Respondent(s) : --- HON'BLE THE CHIEF JUSTICE MR. AKIL KURESHI HON'BLE MS. JUSTICE REKHA BORANA

Order 13/01/2022 The petitioner is in the business of development of real estate. For the assessment year 2015-16, the return filed by the petitioner was taken in scrutiny. The assessing officer thereafter passed an order under Section 143(3) of the Income Tax Act, 1961 (for short ‘the Act’). The assessing officer thereafter issued notice dated 31.05.2019 reopening the assessment for the said assessment year 2015-16. The petitioner raised objections on (Uploaded on 14/01/2022 at 09:54:34 AM) (Downloaded on 28/10/2026 at 12:49:40 AM) (2 of 3) [CW-17547/2021] 04.09.2019. These objections were disposed of on 24.09.2021 and the order of assessment was passed on 30.09.2021, in which with the aid of Section 43CA, the assessing officer made an addition of a sum of Rs.9.51 Crores (rounded of) in the income of the assessee. The petitioner has challenged the notice of reopening the assessment as well as the consequential order of assessment passed thereon.

Learned counsel for the petitioner submitted that the petitioner had disputed the stamp duty valuation by pointing out to the assessing officer that the market value of the property sold by the petitioner was much lower and there were no buyers prepared to purchase the property at the rates fixed for the purpose of collection of stamp duty. He had also asked for making a reference to the valuer in view of this difference in the stamp duty valuation and what the petitioner claimed was the real market value of the property in question. The assessing officer without accepting the request or even adverting to it, in breach of the principles of natural justice, passed the order of assessment within less than a week of disposing of the objections of the petitioner to the reopening of the assessment.

It prima facie appears that because of advancing deadline for completing the assessment, the assessing officer has passed a hurried order of assessment within less than a week of disposing of the objections of the petitioner. In the process, the assessing officer has without recording any reasons, not accepted the request of the petitioner for making a reference of valuation of the property to the valuer in terms of Section 50C of the Act.

Issue notice, returnable on 27.01.2022. ‘Dasti’ service permitted (Uploaded on 14/01/2022 at 09:54:34 AM) (Downloaded on 28/10/2026 at 12:49:40 AM) (3 of 3) [CW-17547/2021] By way of ad-interim relief, the order of assessment shall stand stayed. (REKHA BORANA),J (AKIL KURESHI),CJ 1-jayesh/- Powered by TCPDF (www.tcpdf.org) (Uploaded on 14/01/2022 at 09:54:34 AM) (Downloaded on 28/10/2026 at 12:49:40 AM)

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