RAJAT BHASIN vs. ITO AND ANOTHER

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W.P.(C)/7525/2024HC DelhiDLHC01031368202429 August 2024Bench: HON'BLE MR. JUSTICE YASHWANT VARMA,HON'BLE MR. JUSTICE RAVINDER DUDEJA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the writ petition. While acknowledging the discrepancy in the Section 148A(b) notice, which alluded to AY 2020-21 instead of AY 2017-18, the Court found that the revenue had placed before it verification details demonstrating an evident typographical error. The Suspicious Transaction Report, which formed the basis for the notice, clearly pertained to unexplained expenditure for FY 2016-17, corresponding to AY 2017-18. Therefore, the Court found no justification to interfere with the order under Section 148 on this ground. However, the Court explicitly left all other rights and contentions of the writ petitioner open to be addressed in the course of the reassessment proceedings. No specific finding was made on the merits of the reassessment itself, only on the procedural challenge raised.

What were the facts?

The petitioner, Rajat Bhasin, challenged a reassessment action initiated by the Income Tax Officer (ITO). The primary contention was that the notice under Section 148A(b) of the Income Tax Act, 1961, alluded to material pertaining to Assessment Year (AY) 2020-21, but the reassessment was sought to be commenced for AY 2017-18. The High Court had previously granted time to the respondent revenue to obtain instructions. During the subsequent hearing, the revenue's counsel presented verification details indicating a typographical error in the Section 148A(b) notice. The Suspicious Transaction Report, forming the basis for the notice, referred to unexplained expenditure of INR 10,44,00,000/- for Financial Year 2016-17, corresponding to AY 2017-18.

What were the issues?

1. Whether the reassessment action initiated for AY 2017-18 is vitiated due to a discrepancy in the notice under Section 148A(b) of the Income Tax Act, 1961, which alluded to material pertaining to AY 2020-21? (Question of mixed law and fact, concerning Section 148A(b) and Section 147/148 of the Act). Assessee's contention: The reassessment action is invalid because the notice under Section 148A(b) incorrectly referenced AY 2020-21, while the reassessment was sought for AY 2017-18, indicating a fundamental flaw in the initiation process. Revenue's contention: The discrepancy in the notice was a mere typographical error. The underlying material, a Suspicious Transaction Report concerning unexplained expenditure for FY 2016-17 (AY 2017-18), clearly indicated the correct assessment year for reassessment.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148

AI-generated summary — verify with the full judgment below

$~4 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 7525/2024 & CM APPL. 31338/2024 (Interim Relief)

RAJAT BHASIN

.....Petitioner Through: Mr. Kaushik and Mr. Ram Naresh, Advs.

versus

ITO AND ANOTHER

.....Respondents Through: Mr. Sunil Agarwal, SSC along with Mr. Shivansh B. Pandya, Mr. Viplav Acharya, JSCs and Mr. Utkarsh Tiwari, Adv.

Mr. Debesh Panda, SSC.

CORAM:

HON'BLE MR. JUSTICE YASHWANT VARMA

HON'BLE MR. JUSTICE RAVINDER DUDEJA

O R D E R %

29.08.2024

1.

We had in terms of our order of 24 May 2024 taken note of the principal challenge which stood raised to the reassessment action with it being contended that although the notice under Section 148A(b) of the Income Tax Act, 1961 [„Act‟] alluded to material pertaining to Assessment Year [„AY‟] 2020-21, the reassessment action was sought to be commenced with respect to AY 2017-18. It was in the aforesaid context that we had accorded time to Mr. Agarwal, learned counsel for the respondent to obtain instructions. 2. Mr. Panda, who has appeared for the respondents today, has placed before us the verification details on the basis of which reassessment action was sought to be initiated and draws our attention to the evident typographical error which appears in the Section 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 03/09/2024 at 11:56:42

148A(b) notice. 3. As per the extract which has been placed for our perusal, it is apparent that the Suspicious Transaction Report had alluded to unexplained expenditure of INR 10,44,00,000/- pertaining to Financial Year 2016-17 and thus corresponding to AY 2017-18. It is thus apparent that the notice suffers from an evident typographical error. 4. In view of the aforesaid, while we find no justification to interfere with the order under Section 148 on the aforesaid score and dismiss the instant writ petition, we leave all other rights and contentions of the writ petitioner open to be addressed in the course of reassessment proceedings. 5. Copies of the material handed over to us by Mr. Panda be included on our digital record.

YASHWANT VARMA, J

RAVINDER DUDEJA, J AUGUST 29, 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 03/09/2024 at 11:56:42

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