RUKMANI SINGH vs. PRINCIPAL COMMISSIONER OF INCOME TAX 12 & ORS.

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W.P.(C)/1275/2023HC DelhiDLHC01002839202306 February 2024Bench: HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV,HON'BLE MR. JUSTICE YASHWANT VARMA2 pages
AI SummaryAllowed

What did the High Court hold?

The Delhi High Court allowed the writ petition and quashed the notice dated July 9, 2022, issued under Section 148A(d) of the Income Tax Act, 1961. The Court found that the initiation of action against the writ petitioner was based on a wholly incorrect and unsubstantiated plea. The impugned notice proceeded on the premise that the petitioner had sold an immovable property below the registered value for Rs. 23,00,000/-. However, the Court observed that the Agreement to Sell dated March 3, 2017, on record, clearly indicated that the petitioner was the purchaser (vendee) and not the seller. Therefore, the factual basis for issuing the notice was erroneous. The Court noted the respondents' failure to file a reply despite repeated opportunities, leading to their right to do so being foreclosed. The ratio decidendi is that reassessment proceedings initiated on a demonstrably false factual premise are liable to be quashed.

What were the facts?

The petitioner, Rukmani Singh, assailed a notice dated July 9, 2022, issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2017-2018. The notice was based on an order under Section 148A(d), which alleged the petitioner had sold an immovable property below its registered value, citing a sale consideration of Rs. 23,00,000/-. The respondents, Principal Commissioner of Income Tax and others, failed to file a reply or counter affidavit despite multiple opportunities granted by the court from February 1, 2023, onwards. Consequently, their right to do so was foreclosed.

What were the issues?

1. Whether the notice dated July 9, 2022, purporting to be under Section 148 of the Income Tax Act, 1961, for AY 2017-2018, is valid, considering the factual premise on which it was issued. Assessee's Contention: The petitioner argued that the notice was based on a fundamentally incorrect premise. The order under Section 148A(d) stated the petitioner sold property for Rs. 23,00,000/-, implying the petitioner was the seller. However, an Agreement to Sell dated March 3, 2017, on record, shows the petitioner was the purchaser (vendee) in the only transaction he was party to. Revenue's Contention: The judgment does not record any specific contentions made by the revenue, other than their failure to file a reply or counter affidavit.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A(d),Section 50C

AI-generated summary — verify with the full judgment below

$~24 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 1275/2023

RUKMANI SINGH

..... Petitioner Through: Mr. A.K. Babbar, Mr. Surendra Kumar, Advs.

versus

PRINCIPAL COMMISSIONER OF INCOME TAX 12 & ORS.

..... Respondent Through: Mr. Kunal Sharma, Sr. SC with Ms. Zehra Khan, Jr. SC, Mr. Shubendru, Advs.

CORAM:

HON'BLE MR. JUSTICE YASHWANT VARMA HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV

O R D E R %

06.02.2024 1. The order sheet would reflect that despite time having been granted right from 01 February 2023 for the respondents to obtain instructions and to file a reply, the same has not been complied with. Despite repeated opportunities having been granted on 14 March 2023 and again on 13 October 2023, the respondents have also failed to file a counter affidavit. Their right to do so consequently stands foreclosed. 2. The writ petitioner assails the validity of the impugned notice dated 09 July 2022 purporting to be under Section 148 of the Income Tax Act, 1961 [“Act”] for Assessment Year [“AY”] 2017-2018. As is manifest from a reading of the order ultimately passed and referable to Section 148A(d), the initiation of action against the writ petitioner proceeds on the premise that he had sold an immovable property below the registered value as computable in terms of Section 50C of 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 13/12/2024 at 15:33:39

the Act. The order further proceeds to recite that the petitioner has sold the property for a consideration of Rs.23,00,000/-. 3. However, we find that on the record is placed an Agreement to Sell dated 03 March 2017 and which is stated to be the only transaction to which the writ petitioner was a party. As is ex facie evident from a reading of that agreement, the writ petitioner was the purchaser and thus, the vendee. It is thus evident and apparent that the notice has proceeded on a wholly incorrect and unsubstantiated plea. 4. We consequently allow the writ petition and quash the notice dated 09 July 2022 passed under Section 148A(d) of the Act. The writ petition stands disposed of accordingly.

YASHWANT VARMA, J.

PURUSHAINDRA KUMAR KAURAV, J. FEBRUARY 06, 2024 neha

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 13/12/2024 at 15:33:39

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