HANS RAJ DHANKAR vs. ASSISTANT COMMISSIONER OF INCOME TAX

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W.P.(C)/3411/2025HC DelhiDLHC01014062202527 March 2025Author: HON'BLE MR. JUSTICE VIBHU BAKHRU,HON'BLE MR. JUSTICE TEJAS KARIA3 pages
AI SummaryPartly Allowed

What did the High Court hold?

The Delhi High Court held that compelling the assessee to deposit any amount against the demand raised would be manifestly erroneous, given the difficulty in comprehending the reasons for the addition in the assessment order. The Court noted that the Revenue's counsel was unable to explain the basis of the addition. Consequently, the Court allowed the writ petition and restrained the Revenue from taking any coercive steps for the recovery of the demand until the disposal of the petitioner's appeal before the CIT(A). The Court did not decide on the merits of the appeal itself, focusing solely on the interim relief concerning the stay of demand.

What were the facts?

The petitioner, Hans Raj Dhankar, filed a writ petition challenging an order dated 27.02.2024, by which his application for a stay of demand during the pendency of his appeal before the CIT(A) was rejected. The petitioner was asked to deposit 20% of the disputed demand. The assessment proceedings were initiated under Section 148 for AY 2016-17, alleging escaped income. The Assessing Officer (AO) made an addition of ₹10,00,00,000/- to the returned income of ₹1,29,08,310/- via an assessment order dated 31.03.2022. The assessment order refers to Section 69A, but the petitioner denies receiving any such sum. The petitioner sought clarification on the basis of the addition, but the court found the reasons for the addition unclear.

What were the issues?

1. Whether the impugned order dated 27.02.2024, which rejected the petitioner's application for stay of demand and required a 20% deposit, is sustainable in light of the unclear grounds for the addition made in the assessment order, turning on the interpretation of Section 147 and Section 69A of the Income Tax Act, 1961. Assessee's Contention: The petitioner argued that the assessment order lacks clarity regarding the basis of the addition of ₹10,00,00,000/-, making it erroneous to compel him to deposit any amount. He denied receiving the sum and sought clarification from the AO, which was not adequately provided. Revenue's Contention: The Revenue's counsel was unable to refer to any discernible reasons from the assessment order justifying the addition and could not explain the transaction or allegation on which the assessment order was passed.

Which sections of the Income-tax Act were involved?

Section 148,Section 147,Section 69A

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
$~15 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 3411/2025 CM APPL. 16089/2025 HANS RAJ DHANKAR .....Petitioner Through: Mr Himanshu Upadhyay and Ms Ruby Sharma, Advocates. versus ASSISTANT COMMISSIONER OF INCOME TAX .....Respondent Through: Mr Sanjay Kumar, SSC, Ms Monica Benjamin and Ms Easha Kadian, JSCs for the Revenue. CORAM: HON'BLE MR. JUSTICE VIBHU BAKHRU HON'BLE MR. JUSTICE TEJAS KARIA

O R D E R %

27.03.

2025

1.

The petitioner has filed the present petition, inter alia, impugning an order dated 27.02.2024 [impugned order] passed by the respondent whereby the petitioner’s application for stay of demand during the pendency of the appeal before the Commissioner of Income Tax (Appeals) [CIT(A)] was not acceded to. The petitioner was further called upon to deposit twenty per cent of the disputed demand in terms of the CBDT instruction number 1914 and as partially modified by Office Memorandum dated 31.07.2017. 2. The petitioner was issued a notice under Section 148 of the Income Tax Act, 1961 [the Act] alleging that his income had escaped assessment for Assessment Year [AY] 2016-17 within the meaning of Section 147 of the Act. The petitioner was called upon to file the return for the relevant AY.

3.

Thereafter, the petitioner was issued various notices, however, it is alleged that the petitioner did not provide the information as sought for by the Assessing Officer [AO]. 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. The Order is downloaded from the DHC Server on 01/07/2025 at 18:38:24

4.

Resultantly, the proceedings culminated in the assessment order dated 31.03.2022 whereby the AO made an addition of ₹ 10,00,00,000/- over and above the income of ₹ 1,29,08,310/- as returned by the petitioner.

5.

A plain reading of the assessment order does not clearly indicate the ground on which the said addition has been made. Although the assessment order refers to Section 69A of the Act, the petitioner had denied that he had received any such sum during the Financial Year 2015-16 relevant to AY 2016-17. The petitioner had also called upon the AO to indicate the basis on which the petitioner is stated to have received the said amount or the details of the transaction on the basis of which the addition is sought to be made. However, the record, as produced, does not indicate any comprehensible reasons, which could possibly lead to the addition.

6.

Mr Kumar, learned counsel appearing for the Revenue is unable to refer to any reasons discernable from the assessment order on the basis of which the addition is made.

7.

Whilst it does appear that some allegations have been made, we are at a loss to understand precisely as to what the AO has alleged. We also requested Mr Kumar, to explain the transaction, however, he is also unable to explain as to what exactly is the allegation on the basis of which the assessment order is passed.

8.

In the given circumstances of this case, it would be manifestly erroneous to compel the assessee to deposit any amount against the demand raised, the reasons of which, as stated above, are difficult to comprehend. Accordingly, we allow the present petition and restrain the Revenue from taking any steps (coercive or otherwise) for recovery of the demand pursuant to the assessment order, till the disposal of the appeal, preferred by the 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. The Order is downloaded from the DHC Server on 01/07/2025 at 18:38:24

petitioner.

9.

The petition is allowed in the aforesaid terms. The pending application is also disposed of.

VIBHU BAKHRU, J

TEJAS KARIA, J MARCH 27, 2025/sms

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. The Order is downloaded from the DHC Server on 01/07/2025 at 18:38:24

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