PCJ SECURITIES PRIVATE LIMITED vs. INCOME TAX OFFICER,WARD 19(1) DELHI & ORS.

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W.P.(C)/6415/2022HC DelhiDLHC01015484202204 May 2022Bench: HON'BLE MR. JUSTICE MANMOHAN,HON'BLE MR. JUSTICE DINESH KUMAR SHARMA3 pages
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What did the High Court hold?

The Delhi High Court allowed the writ petition and quashed the impugned Assessment Order dated March 30, 2022, and the demand notice dated March 30, 2022. The Court noted the concession made by the respondent-revenue that there were errors apparent on the face of the record. The Court also considered the petitioner's submissions that the facts and figures in the impugned order did not pertain to the petitioner, including the incorrect depreciation amount claimed and the lack of nexus with the addition. The Court expressed surprise at the glaring mistakes occurring despite the elaborate faceless assessment mechanism under Section 144B of the Act. The Court directed the Principal Commissioner, National Faceless Assessment Centre, to be more cautious and the CBDT to ensure such mistakes do not occur in the future. The matter was effectively remanded back to the Assessing Officer for de novo assessment, if the law permitted further steps.

What were the facts?

The petitioner, PCJ Securities Private Limited, filed a writ petition challenging an assessment order dated March 30, 2022, passed by the National Faceless Assessment Center, Delhi, under Section 147 read with Section 144B of the Income Tax Act, 1961, and a demand notice dated March 30, 2022. The petitioner contended that the assessment order and show cause notice contained incorrect facts and figures. Specifically, it was argued that the claimed depreciation of Rs. 13,42,354/- was not made in the return of income, and only Rs. 2,50,425/- was claimed. Furthermore, the petitioner stated that the demand notice did not pertain to them and that the show cause notice dated March 29, 2022, with a demand of Rs. 2,32,08,308/-, was incorrect and lacked nexus with the addition. The revenue conceded that there were errors apparent on the face of the record.

What were the issues?

1. Whether the assessment order dated March 30, 2022, passed under Section 147 read with Section 144B of the Income Tax Act, 1961, and the demand notice dated March 30, 2022, are valid and based on correct facts and figures pertaining to the petitioner. Assessee's Contentions: - The petitioner argued that the assessment order and show cause notice contained factual inaccuracies, particularly regarding the claimed depreciation amount. The petitioner stated that it claimed depreciation of Rs. 2,50,425/-, not Rs. 13,42,354/- as mentioned in the impugned order and show cause notice. - The petitioner also contended that the demand notice dated March 30, 2022, did not relate to them and that the show cause notice dated March 29, 2022, for Rs. 2,32,08,308/-, was incorrect and had no nexus with the addition made. - It was further stated that the Principal Commissioner, Shillong, who accorded approval, lacked jurisdiction. Revenue's Contentions: - The respondent-revenue, through its counsel, fairly admitted that there were errors apparent on the face of the record.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B

AI-generated summary — verify with the full judgment below

W.P.(C) 6415/2022 Page 1 of 3 $~5 * IN THE HIGH COURT OF DELHI AT NEW DELHI

+ W.P.(C) 6415/2022 & CM APPL. 19427/2022

PCJ SECURITIES PRIVATE LIMITED ..... Petitioner

Through: Dr. Rakesh Gupta, Advocate with Mr. Somil Agarwal and Mr. Anshul

Mittal, Advocates.

versus

INCOME TAX OFFICER, WARD 19(1) DELHI & ORS.

..... Respondents

Through: Mr. Sunil Aggarwal, Advocate with Mr. Tushar Gupta, Advocate.

CORAM:

HON'BLE MR. JUSTICE MANMOHAN

HON'BLE MR. JUSTICE DINESH KUMAR SHARMA

Date of Decision: 04th May, 2022

CORAM: HON'BLE MR. JUSTICE MANMOHAN HON'BLE MR. JUSTICE DINESH KUMAR SHARMA J U D G M E N T MANMOHAN, J (Oral) 1. Present writ petition has been filed challenging the assessment order dated 30 : th March, 2022 passed by National Faceless Assessment Center, Delhi under Section 147 read with Section 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) and demand notice dated 30th 2. On the last date of hearing, learned counsel for the petitioner had

March, 2022. Digitally Signed By:KRISHNA BHOJ Signing Date:05.05.2022 20:47:40 Signature Not Verified

W.P.(C) 6415/2022 Page 2 of 3 stated that the facts and figures mentioned in the impugned assessment order dated 30th 3. Today, learned counsel for the petitioner emphasizes that the petitioner never claimed depreciation of Rs.13,42,354/- in its return of income tax as mentioned in the Show Cause Notice and in the Assessment Order. He states that only a depreciation of Rs.2,50,425/- was claimed by the petitioner. He also states that the demand raised vide demand notice dated 30 March, 2022 do not pertain to the petitioner. th 4. He further states that the petitioner is assessed at Delhi whereas the Show Cause Notice dated 29 March, 2022 of Rs.2,32,08,308/- is patently incorrect and has no nexus with the addition made. th March, 2022 and the Assessment Order dated 30th 5. Mr. Sunil Aggarwal, learned counsel for the respondent-revenue fairly admits that there are errors apparent on the face of the record. He, on instructions, states that the matter be remanded back to the Assessing Officer for de novo assessment in accordance with law. March, 2022 mention that Principal Commissioner, Shillong, despite having no jurisdiction, had accorded approval. 6. Keeping in view the aforesaid concession as well as the fact that the facts and figures mentioned in the impugned order do not pertain to the petitioner, the present matter is allowed and the impugned Assessment Order as well as demand notice dated 30th 7. If the law permits the respondent-revenue to take further steps in the matter, it shall be at liberty to do so. Needless to state that if and when such steps are taken and if the petitioner has a grievance, it shall be at liberty to take its remedies in accordance with law. March, 2022 are quashed. 8. This Court is actually surprised that despite an elaborate mechanism Digitally Signed By:KRISHNA BHOJ Signing Date:05.05.2022 20:47:40 Signature Not Verified

W.P.(C) 6415/2022 Page 3 of 3 of checks and balances and multiple authorities like (assessment units, verification units, technical units, review units, Regional Faceless Assessment Centres and National Faceless Assessment Centre) being set up under Section 144B of the Act, such glaring mistakes can happen. This Court is also of the view that faceless assessment does not mean that no responsibility can be fixed for passing such an erroneous order. 9. The PCIT, National Faceless Assessment Centre is directed to be more cautious while passing the Assessment Orders and the CBDT is directed to ensure that such glaring mistakes do not occur in the future. 10. Learned counsel for the respondent-revenue is directed to forward a copy of this Order to the Chairman, CBDT and the PCIT, National Faceless Assessment Centre.

MANMOHAN, J

DINESH KUMAR SHARMA, J MAY 4, 2022 js

Digitally Signed By:KRISHNA BHOJ Signing Date:05.05.2022 20:47:40 Signature Not Verified

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