M/S KOUSHAL CLOTH HOUSE vs. NATIONAL FACELESS ASSESSMENT CENTRE, DELHI THROUGH PR. CHIEF COMMISSIONER OF INCOME-TAX, & ORS.

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W.P.(C)/621/2025HC DelhiDLHC01001310202516 April 2025Author: HON'BLE MR. JUSTICE VIBHU BAKHRU,HON'BLE MR. JUSTICE TEJAS KARIA4 pages
AI SummaryPartly Allowed

What did the High Court hold?

The High Court directed the concerned authorities to provide the petitioner with a temporary login ID and password to enable it to file an online appeal against the assessment order dated March 20, 2024. Alternatively, the authorities were permitted to specify any other method, including accepting a physical appeal, to facilitate the petitioner's appeal. The petitioner was granted thirty days from the date of such specification to file the appeal, and if filed within this period, it would be considered on merits without being influenced by delay. The impugned assessment order dated March 20, 2024, was stayed in the interim, with the stay to be vacated if the petitioner failed to avail statutory remedies within the stipulated period. The Court clarified that no observations were made on the merits of the case, and all rights and contentions of the parties on merits were reserved. The petition was disposed of on these terms.

What were the facts?

The petitioner, M/s. Koushal Cloth House, is an individual who claims to have retired from a firm of the same name on March 31, 2016. The firm's business was subsequently carried on by another partner as a sole proprietorship until his demise on February 17, 2020. The petitioner is aggrieved by an ex-parte assessment order dated March 20, 2024, for Assessment Year (AY) 2019-20, resulting in a demand of ₹14,21,87,368/-. The petitioner alleges that the assessment was based on erroneous information from Canara Bank, reflecting transactions of M/s. Multiwal Duplex Pvt. Ltd. as those of the firm. A previous writ petition challenging this order was dismissed with liberty to avail statutory remedies. The petitioner filed the current writ petition because it could not file an online appeal due to a missing login password, potentially created by a fraudster, and could not respond to a Section 148 notice for AY 2017-18.

What were the issues?

1. Whether the petitioner should be provided with a fresh login password or an alternative method to file an appeal against the assessment order dated March 20, 2024, for AY 2019-20, and to reply to the notice under Section 148 for AY 2017-18, given its inability to access the online portal. The Assessee (Petitioner) argued that it is unable to file its statutory appeal and respond to notices due to the loss of its login password, which it suspects was created fraudulently. It sought directions for a fresh password or permission to file hard copies. The Revenue (Respondents) initially stated they were seeking instructions. Subsequently, they informed the Court that the Assessing Officer had raised a ticket with ITBA and sent an email to DGIT System without a response. They also stated that the assessment for AY 2017-18 was NIL, rendering the Section 148 notice response unnecessary.

Which sections of the Income-tax Act were involved?

Section 148

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
$~102 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 621/2025 and CM APPL. 2858/2025 M/S KOUSHAL CLOTH HOUSE .....Petitioner Through: Mr Ravi Kant Chandhok with Mr Vasdev Lalwani and Mr Tushar Sahni, Advocates. versus NATIONAL FACELESS ASSESSMENT CENTRE, DELHI THROUGH PR. CHIEF COMMISSIONER OF INCOME-TAX, & ORS. .....Respondents Through: Mr Sanjay Kumar, SSC with Ms Monica Benjamin, Ms Easha Kadian and Ms Nancy Jain, Advocates. CORAM: HON'BLE MR. JUSTICE VIBHU BAKHRU HON'BLE MR. JUSTICE TEJAS KARIA

O R D E R % 16.04.2025

1.

The petitioner has filed the present petition, inter alia, praying as under: “(a) To direct the Respondents to allot fresh Log-in password to the Petitioner to enable the Petitioner to file appeal against impugned Order of assessment dated 20.03.2024 passed by Respondent No.2 for assessment year 2019 — 2020 and reply to Notice/s issued under section 148 for assessment year 2017-2018; (b) In the alternative, in absence fresh log-in password, the Respondents be directed to accept hard copy of the appeal against assessment order passed for assessment year 2019-20 and reply to notice under section 148 for assessment year 2017-18.” This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.

2.

The petitioner is an individual. He claims that he was a constituent partner of a firm carrying out business under the name M/s. Koushal Cloth House having its office at II-J/21 Lajpat Nagar, New Delhi. The petitioner claims that he retired from the said firm w.e.f. 31.03.2016, and thereafter, the business of the firm was carried on by the remaining partner Sh. Raman Kumar Matlani as a sole proprietor under the name and style of M/s. Koushal Cloth House. It is stated that the said business was discontinued on the demise of Sh. Raman Kumar Matlani on 17.02.2020. 3. The petitioner is essentially aggrieved by the assessment order passed in respect of the erstwhile firm for Assessment Year [AY] 2019-20 which has resulted in a demand of ₹14,21,87,368/- including interest. The said ex parte assessment order was passed on 20.03.2024. 4. It is the petitioner’s case that the assessment has been framed in respect of certain transactions, which were entered into by M/s. Multiwal Duplex Pvt. Ltd., a company having its office in Kashipur. It is stated that the said company maintained accounts with the Kashipur branch of Canara Bank. It is contended that Canara Bank has erroneously sent information to the Income Tax Department reflecting the transactions of M/s. Multiwal Duplex Pvt. Ltd. as transactions of a person holding PAN AABFM1475E, which was allotted to the erstwhile firm M/s. Koushal Cloth House.

5.

In view of the above, the petitioner had also filed the writ petition being WP(C) 9259/2024, assailing the ex parte assessment order dated 20.03.2024. The said petition was dismissed by an order dated 03.09.2024 with liberty to the petitioner to avail of its statutory remedies. In the aforesaid context, the petitioner has filed the present petition contending that This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.

it is unable to file an appeal online as it does not have the login password, which may have been created by a fraudster. In absence of the login password, the petitioner is also unable to respond to the notice under Section 148 of the Income Tax Act, 1961 [the Act] which was issued in respect of AY 2017-18. 6. In the aforesaid context, this court had passed an order directing Mr Kumar, the learned counsel who appears for the Revenue to take instructions as to the method which can be adopted by the petitioner to file an appeal and avail its statutory remedies. The present petition was listed on two occasions thereafter, on 18.02.2025 and 21.03.2025. However, the learned counsel was unable to obtain the necessary instructions and had sought further time for the said purpose.

7.

Mr Kumar now submits that he has received instructions from the Assessing Officer [AO] but the same are of little assistance to the petitioner. He states that the AO has raised a “ticket” with ITBA and has also sent an e- mail to DGIT System but he has not yet received any response from the said authorities. He also submits that the written instructions received by him indicates that the Faceless Assessment Unit has assessed the income in respect of AY 2017-18 as NIL. Thus, there is now no requirement for the petitioner to respond to the notice under Section 148 of the Act issued for the said assessment year.

8.

In view of the above, we consider it apposite to dispose of the present petition by directing the concerned authorities to provide the petitioner a temporary login ID and password to enable the petitioner to file an online appeal against the impugned assessment order dated 20.03.2024. It is also open to the concerned authorities to indicate any other method, including This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.

permitting the petitioner to furnish his appeal physically instead of online, to facilitate the petitioner to appeal the assessment order dated 20.03.2024. On the concerned authorities specifying the method by which the petitioner can file an appeal, the petitioner may do so within a period of thirty days thereafter. And, if such appeal is filed within the said period, the same would be considered on merits uninfluenced by the question of delay.

9.

In the meanwhile, the impugned assessment order dated 20.03.2024 shall remain stayed. If the petitioner fails to avail of his statutory remedies within the aforesaid period, the stay order shall stand vacated.

10.

We clarify that we have not made any observation regarding the merits of the petitioner’s case and this order is confined to addressing the petitioner’s grievance regarding its disability to file an appeal against the said impugned assessment order. Thus, all rights and contentions of the parties on merits are reserved.

11.

The petition is disposed of in the aforesaid terms. Pending application is also disposed of. VIBHU BAKHRU, J TEJAS KARIA, J APRIL 16, 2025/tr Click here to check corrigendum, if any This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.

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