SUKHDEEP SINGH CHADHA vs. ACIT, CIRCLE INTERNATIONAL TAXATION - 1(2)(1), DELHI

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W.P.(C)/9260/2024HC DelhiDLHC01039228202409 July 2024Bench: HON'BLE MR. JUSTICE YASHWANT VARMA,HON'BLE MR. JUSTICE RAVINDER DUDEJA3 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the writ petition, setting aside the order under Section 148A(d) and the notice under Section 148, both dated March 30, 2024. The Court found that the AO had demonstrably failed to consider the petitioner's objections regarding the sale of the property in FY 2014-15 and the petitioner's NRI status during AY 2020-21. The Court held that these assertions were fundamental to the AO's jurisdiction to assume powers under Section 148. Since the revenue could not dispute these facts, the Court concluded that the reassessment proceedings were liable to be quashed. The AO was directed to re-examine the matter, taking into account the petitioner's principal objections and any other contentions that may be raised by the petitioner.

What were the facts?

The petitioner, Sukhdeep Singh Chadha, filed a writ petition challenging an order under Section 148A(d) and a notice under Section 148 of the Income Tax Act, 1961, both dated March 30, 2024. The Assessing Officer (AO) initiated reassessment proceedings for Assessment Year (AY) 2020-21 based on the belief that rental income from a Dubai property had escaped assessment. The petitioner contended that the property was purchased in FY 2007-08 and sold in FY 2014-15, rendering reassessment for AY 2020-21 unjustified. Furthermore, the petitioner claimed to be a Non-Resident Indian (NRI) during the relevant AY, which would exempt them from tax under the Act. The High Court noted that the AO failed to consider these objections in the order under Section 148A(d).

What were the issues?

1. Whether the Assessing Officer erred in initiating reassessment proceedings under Section 148A(d) and Section 148 of the Income Tax Act, 1961, for AY 2020-21, when the property in question was sold in FY 2014-15? 2. Whether the Assessing Officer erred in initiating reassessment proceedings under Section 148A(d) and Section 148 of the Income Tax Act, 1961, when the petitioner was a Non-Resident Indian (NRI) during the relevant AY? Assessee's Contentions: The petitioner argued that since the property was sold in FY 2014-15, there was no basis for reassessment for AY 2020-21. Additionally, the petitioner asserted NRI status for the relevant AY, which would preclude them from being taxed under the Act. These objections went to the root of the AO's jurisdiction. Revenue's Contentions: The judgment does not record specific contentions from the revenue regarding the petitioner's arguments. However, the fact that the AO issued the impugned order and notice suggests a disagreement with the petitioner's claims.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148

AI-generated summary — verify with the full judgment below

$~116 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 9260/2024

SUKHDEEP SINGH CHADHA

.....Petitioner

Through: Mr. P. Roychaudhuri, Adv.

versus

ACIT, CIRCLE INTERNATIONAL TAXATION - 1(2)(1), DELHI

.....Respondent

Through: Mr. Vipul Aggarwal, SSC.

CORAM:

HON'BLE MR. JUSTICE YASHWANT VARMA

HON'BLE MR. JUSTICE RAVINDER DUDEJA

O R D E R %

09.07.2024

CM APPL. 37932/2024 (Ex.) 1. Allowed subject to all just exceptions. 2. Application stands disposed of. WP(C) 9260/2024 & CM. APPL. 37931/2024 (interim relief) 3. This writ petition has been preferred seeking the following reliefs: (A) A Writ of Certiorari to call for the records relating to the Impugned Order under 148A(d) of the Income Tax Act and also the Impugned Notice under section 148 of the Income Tax Act, 1961 both dated 30.03.2024 issued by the Respondent in the Petitioner’s case for the Assessment Year; (B) Pass such other and further order/orders as this Hon’ble Court may deem fit and proper in the facts and circumstances of the present case.”

4.

The petitioner is essentially aggrieved by the reassessment action which has been initiated by the respondents pursuant to a notice dated 12 March 2024 under Section 148A(b) of the Income Tax Act, 1961 [“Act”]. 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 19/07/2024 at 15:28:20

5.

As is manifest from a perusal of the said notice the same pertained to Assessment Year [“AY”] 2020-21 and proceeded on the premise that the petitioner had failed to disclose details with respect to a house property which was purchased in Dubai and the rental income generated therefrom having not been disclosed. It is on the aforesaid basis that the Assessing Officer [“AO”] had come to conclude that that there existed reason to believe that income from house property had escaped assessment in AY 2020-21. 6. In response to the aforesaid notice, the petitioner had categorically asserted that the residential unit had been purchased in Financial Year [“FY”] 2007-08 and had been sold in FY 2014-15. Consequently, it was averred that there could not possibly exist any justification for initiating reassessment proceedings for AY 2020-21. It also appears to have been submitted before the AO that the petitioner was a Non-Resident Indian [“NRI”] in the relevant AY and consequently could not have been subjected to tax under the Act. 7. However, as we read the order under Section 148A(d) of the Act, it is manifest that there has been an admitted failure on the part of the AO to either notice or consider the objection so raised. In our considered opinion, the assertion of the petitioner being an NRI, as well as the details with respect to the purchase and sale of the property, went to the very root of the jurisdiction of that authority to assume powers under Section 148. 8. In view of the above, and since the aforesaid facts could not be disputed on behalf of the respondents, we are of the considered opinion that the writ petition is liable to succeed. 9. We accordingly allow the instant writ petition and set aside the order under Section 148A(d) as well as the notice under Section 148 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 19/07/2024 at 15:28:20

of the Act, both dated 30 March 2024. 10. We direct the AO to re-examine the matter bearing in mind the two principal objections of the petitioner which have been noticed above, as also any other contention that may be addressed and canvassed by the writ petitioner before proceeding further.

YASHWANT VARMA, J.

RAVINDER DUDEJA, J. JULY 9, 2024/kk 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 19/07/2024 at 15:28:20

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