SURYA ROSHNI LIMITED vs. PRINCIPLE COMMISSIONER OF INCOME TAX DELHI 7

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W.P.(C)/3233/2024HC DelhiDLHC01010704202404 March 2024Bench: HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV,HON'BLE MR. JUSTICE YASHWANT VARMA2 pages
AI SummaryDismissed

What did the High Court hold?

The Delhi High Court held that the submission of the petitioner, that the Principal Commissioner failed to record satisfaction, could not be sustained. The Court noted that paragraph 5 of the impugned Notice indicated that the Principal Commissioner appeared to refer to Explanation 2 to Section 263 of the Act. This explanation suggests that if a revisional authority opines that an order was passed without making inquiries or verification, it would itself render the order prejudicial to the interest of the Revenue. The Court further observed that the alleged failure to conduct an inquiry was not questioned before them. Consequently, the Court found no reason to interfere with the impugned notice at that stage. The writ petition was dismissed, but this order was made without prejudice to the rights and contentions of the writ petitioner.

What were the facts?

The petitioner, Surya Roshni Limited, filed a writ petition before the Delhi High Court challenging a Notice dated January 3, 2024, issued under Section 263 of the Income Tax Act, 1961. The petitioner argued that the Principal Commissioner of Income Tax failed to record the necessary satisfaction that the assessment order was prejudicial to the interest of the Revenue, a prerequisite for invoking Section 263 powers. The assessment year(s) and the specific assessment order under challenge are not explicitly stated in the judgment. The amount in dispute is also not mentioned. The procedural history involves the issuance of the Section 263 notice and the subsequent filing of the writ petition.

What were the issues?

1. Whether the Principal Commissioner of Income Tax erred in issuing a notice under Section 263 of the Income Tax Act, 1961, without recording satisfaction that the assessment order was prejudicial to the interest of the Revenue? (Question of law, turning on Section 263). Assessee's Contention: The Principal Commissioner's failure to record satisfaction regarding the assessment being prejudicial to the Revenue is a fatal flaw, as such satisfaction is a sine qua non for invoking Section 263 powers. Revenue's Contention: The Principal Commissioner alluded to Explanation 2 to Section 263, which presumes prejudice to the Revenue if an order was passed without making inquiries or verification. The alleged failure to conduct an inquiry was not questioned by the petitioner.

Which sections of the Income-tax Act were involved?

Section 263

AI-generated summary — verify with the full judgment below

$~85 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 3233/2024

SURYA ROSHNI LIMITED

..... Petitioner

Through: Mr. Paritosh Jain, Adv.

versus

PRINCIPLE COMMISSIONER OF INCOME TAX DELHI 7 ..... Respondent Through: Mr. Puneet Rai, Sr. Standing Counsel along with Mr. Ashvini Kumar and Mr. Rishabh Nangia, Standing Counsel.

CORAM:

HON'BLE MR. JUSTICE YASHWANT VARMA

HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR

KAURAV

O R D E R %

04.03.2024

CM APPL 13358/2024 (Exemption)

1.

Allowed subject to all just exceptions. 2. The application stands disposed of. W.P.(C) 3233/2024 and CM APPL 13357/2024 (Interim relief) 3. The writ petitioner impugns a Notice purporting to be under Section 263 of the Income Tax Act, 1961 [“Act”] and is dated 03 January 2024. The principal ground of attack in respect to the notice is that the Principal Commissioner has failed to record any satisfaction pertaining to the assessment being prejudicial to the interest of the Revenue and which according to learned counsel would be the sine qua non for invoking the revisionary powers conferred by Section 263 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 11/03/2024 at 11:30:18

of the Act. 4. We, however, find ourselves unable to sustain that submission since and as is reflected in paragraph 5 of the impugned Notice, the Principal Commissioner appears to allude to Explanation 2 to Section 263 of the Act and which bids us to assume that where the revisional authority be of the opinion that the “order came to be passed without making enquiries or verification”, the same would itself render it prejudicial to the interest of the Revenue. The alleged failure to conduct an enquiry was not questioned before us. In view of the aforesaid, we find no cause to interfere with the impugned notice at this stage. 5. The writ petition fails and shall stand dismissed. The present order, however, shall be without prejudice to the rights and contentions of the writ petitioner.

YASHWANT VARMA, J.

PURUSHAINDRA KUMAR KAURAV, J. MARCH 04, 2024 RW 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 11/03/2024 at 11:30:18

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