ASHISH CHOUDHARY vs. CHIEF COMMISSIONER OF INCOME TAX DELHI-3 NEW DELHI & ANR.

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W.P.(C)/16207/2024HC DelhiDLHC01084098202422 November 2024Bench: HON'BLE MR. JUSTICE VIBHU BAKHRU,HON'BLE DR. JUSTICE SWARANA KANTA SHARMA3 pages
AI SummaryRemanded

What did the High Court hold?

The Delhi High Court set aside the impugned order dated 31.08.2024 passed under Section 148A(d) and the notice dated 31.08.2024 issued under Section 148 of the Act for AY 2018-19. The Court found merit in the Assessee's submission that the approval under Section 151 was granted without proper application of mind, evidenced by the erroneous recording that no reply was received from the Assessee. The Court also noted the Revenue's concession regarding a potential typographical error and its agreement for a remand. Consequently, the matter was remanded to the Assessing Officer to reconsider the Assessee's response to the notice dated 22.08.2024 issued under Section 148A(b) and to pass an informed decision in accordance with the law. The petition was allowed in these terms.

What were the facts?

The petitioner (Assessee) filed a writ petition before the Delhi High Court challenging an order dated 31.08.2024 passed by the Assessing Officer (AO) under Section 148A(d) of the Income Tax Act, 1961, and a notice dated 31.08.2024 issued under Section 148 of the Act for Assessment Year (AY) 2018-19. The Assessee contended that the AO lacked information suggesting income had escaped assessment and that the approval granted by the specified authority under Section 151 was without application of mind. The Assessee argued that its detailed reply to a notice under Section 148A(b) was not considered and that the approval order erroneously noted no reply was received.

What were the issues?

1. Whether the Assessing Officer possessed information suggestive of income escaping assessment for AY 2018-19, as required under Section 148A of the Act? 2. Whether the approval granted by the specified authority under Section 151 of the Act was valid, considering the Assessee's contention that it was granted without application of mind? Assessee's Contentions: The Assessee argued that the AO had no basis to believe income had escaped assessment. It further contended that its reply to the Section 148A(b) notice, providing material to counter allegations of unexplained transactions, was not considered. Crucially, the Assessee highlighted that the approval under Section 151 indicated no reply was received, which was factually incorrect and demonstrated a lack of application of mind by the approving authority. Revenue's Contentions: The Revenue acknowledged that the statement in the approval order regarding no reply being received might be a typographical error. It conceded that the matter could be remanded to the AO and the competent authority for fresh consideration.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148,Section 151

AI-generated summary — verify with the full judgment below

W.P.(C) 16207/2024 Page 1 of 3 $~36 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 16207/2024 & CM APPL. 68094/2024 ASHISH CHOUDHARY .....Petitioner Through: Ms Prem Lata Bansal, Sr Advocate with Mr Shivang Bansal, Advocate. versus CHIEF COMMISSIONER OF INCOME TAX DELHI-3 NEW DELHI & ANR. .....Respondents Through: Mr Indruj Singh Rai, SSC, Mr Sanjeev Menon and Mr Rahul Singh, JSCs, Mr Anmol Jagga, and Mr Prathvi Raj Dey, Advocates. CORAM: HON'BLE MR. JUSTICE VIBHU BAKHRU HON'BLE MS. JUSTICE SWARANA KANTA SHARMA O R D E R % 22.11.2024 1. The petitioner has filed the present petition, inter alia, praying as under :- “(a) a writ of certiorari or any other writ, order or direction in the nature of certiorari quashing the impugned order-dated 31.08.2024 passed by Respondent No.2 u/s 148A(d) of the Act and the notice-dated 31.08.2024 issued by him u/s 148 of the Act for AY 2018-19; b) a writ of prohibition or any other writ, order or direction in the nature of prohibition restraining the respondents from conducting the proceeding in pursuance to notice issued u/s 148 of the Act for AY 2018-19,” 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 28/11/2024 at 12:11:15

W.P.(C) 16207/2024 Page 2 of 3 2. It is the case of the petitioner (hereafter Assessee) that the assessing officer (AO) had no information which is suggestive of the fact that its income for the assessment year (AY) 2018-19, has escaped assessment. 3. In addition, it is contended that the impugned order dated 31.08.2024 (hereafter the impugned order) passed under Section 148A(d) of the Income Tax Act, 1961 (hereafter the Act) is liable to be set aside as the approval granted by the specified authority, which is mandatory, has been granted without application of mind. 4. Ms Bansal, the learned senior counsel appearing for the petitioner submits that on the receipt of notice dated 22.08.2024 issued under Section 148A(b) of the Act, the Assessee had filed a detailed reply along with the relevant material to establish that there was no unexplained transaction, as alleged in the notice issued under Section 148A(b) of the Act. She submits that the said reply in fact has not been considered and the AO has practically proceeded on the basis as set out in the said notice. She points out that the approval granted under Section 151 of the Act is also without application of mind as the same reflects that no reply has been received from the Assessee under Section 148A(b) of the Act. This is evident from the entry at query no.15. 5. The learned counsel appearing for the Revenue submits that it may be a typographical error. However, he fairly states that the matter may be remanded to the AO and the competent authority for considering afresh. 6. In view of the above, the impugned order is set aside and the matter is remanded to the AO to consider the Asseesee’s response to the notice dated 22.08.2024 issued under Section 148A(b) of the Act and take an informed 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 28/11/2024 at 12:11:15

W.P.(C) 16207/2024 Page 3 of 3 decision in accordance with law. 7. The petition is allowed in the aforesaid terms. Pending application also stands disposed of. VIBHU BAKHRU, J SWARANA KANTA SHARMA, J NOVEMBER 22, 2024 M 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 28/11/2024 at 12:11:15

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