TOYO SANITARY WARES PRIVATE LIMITED vs. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 25 (1), DELHI

PDF · subscribers
W.P.(C)/5448/2025HC DelhiDLHC01024232202528 April 2025Bench: HON'BLE MR. JUSTICE VIBHU BAKHRU,HON'BLE MR. JUSTICE TEJAS KARIA2 pages
AI SummaryDismissed

What did the High Court hold?

The Delhi High Court held that the Petitioner had a statutory remedy of appeal and that the controversy raised pertained to the merits of the addition made by the Assessing Officer. Consequently, the Court did not consider it appropriate to entertain the writ petition. The petition was dismissed, leaving it open for the Petitioner to avail the statutory remedy of appeal. The Court clarified that all rights and contentions of the parties were reserved. Furthermore, the Court granted liberty to the Petitioner to file an appeal within one week from the date of the order, and if filed, it would be considered by the Appellate Authority uninfluenced by any question of delay. The operative direction was to dismiss the petition and allow the Petitioner to pursue the statutory appeal.

What were the facts?

The Petitioner, Toyo Sanitary Wares Private Limited, filed a writ petition before the Delhi High Court challenging an assessment order dated March 29, 2025, passed under Section 147 of the Income Tax Act, 1961. The Petitioner also challenged a demand notice dated March 29, 2025, under Section 156 and a penalty notice dated March 30, 2025, under Section 274 read with Section 271AAC(1). The core of the dispute was an addition of Rs. 1,93,60,660/- made by the Assessing Officer (AO) under Section 68 as unexplained cash credit for Assessment Year 2020-21. The Petitioner contended that no loans were received or repaid during the relevant previous year and that the opening and closing balances for loans from four out of six entities remained the same in the company's balance sheet. The Petitioner also claimed that bank statements were provided to the AO, contrary to the AO's assertion.

What were the issues?

1. Whether the addition made by the Assessing Officer under Section 68 of the Income Tax Act, 1961, on account of unexplained cash credit is sustainable, considering the Petitioner's submission that no amount was received or repaid as loan during the relevant previous year and that the opening and closing balances of loans from certain entities remained identical. Assessee's Contention: The Petitioner argued that the addition was unsustainable because no loan was received or repaid in the relevant previous year, and the balance sheet showed identical opening and closing balances for loans from four out of six entities. The Petitioner also asserted that bank statements were provided to the AO, who erroneously proceeded as if they were not. Revenue's Contention: The judgment does not record any specific contentions from the Revenue. However, the AO made an addition under Section 68 and issued consequential notices.

Which sections of the Income-tax Act were involved?

Section 147,Section 156,Section 274,Section 271AAC(1),Section 68

AI-generated summary — verify with the full judgment below

$~89 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 5448/2025 CM APPL. 24776/2025 CM APPL. 24777/2025

TOYO SANITARY WARES PRIVATE LIMITED .....Petitioner Through: Ms. Ananya Kapoor, Mr. Shivam Yadav, Mr. Tarun Chanana, Advocates.

versus

ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 25 (1), DELHI

.....Respondent

Through:

CORAM:

HON'BLE MR. JUSTICE VIBHU BAKHRU

HON'BLE MR. JUSTICE TEJAS KARIA

O R D E R %

28.04.2025

1.

The Petitioner has filed the present petition, inter alia, impugning an assessment order dated 29.03.2025 passed under Section 147 of the Income Tax Act, 1961 [the Act]. The Petitioner also impugns a notice of demand dated 29.03.2025 issued under Section 156 of the Act as well as a penalty notice dated 30.03.2025 issued under Section 274 read with Section 271AAC(1) of the Act. It is the Petitioner’s case that the addition made by the Assessing Officer [AO] under Section 68 of the Act on account of unexplained cash credit amounting to Rs.1,93,60,660/- is unsustainable. Ms. Ananya Kapoor, the learned counsel appearing for the Petitioner submits that the AO failed to consider that no amount was received as loan during the previous year relevant to the Assessment Year [AY] 2020-21 and no loan was repaid. She submits that the balance sheet of the Petitioner’s 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 22:14:51

company reflected loans from six entities, out of which the opening balance and closing balance of the loans from four entities remained the same. She also submits that the bank statements as sought for were provided to the AO; however, the AO has erroneously proceeded on the basis that the Petitioner had not provided the bank statements. 2. According to the Petitioner, no addition could have been made if the opening balances and closing balances of loans, as reflected in the books of accounts, were identical. 3. Concededly, the Petitioner has a statutory remedy of appeal. It is also clear that the controversy raised pertain to the merits of the addition made by the AO. Consequently, we do not consider it apposite to entertain the present petition. The petition is, accordingly, dismissed. We leave it open for the Petitioner to avail the statutory remedy. 4. It is clarified that all rights and contentions of the parties are reserved. 5. We further clarify that in the event the Petitioner files an appeal against the impugned assessment order within a period of one week from date, the same would be considered by the Appellate Authority uninfluenced by the question of delay. 6. All the pending applications also stand disposed of.

VIBHU BAKHRU, J

TEJAS KARIA, J APRIL 28, 2025/KG

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 22:14:51

More judgments on Section 147

All 49,210 judgments and leading authorities on Section 147 →

Recent GST High Court judgments

Search GST case law →