RAJNISH YADAV vs. INCOME TAX OFFICER, WARD 62 (1), DELHI

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W.P.(C)/8943/2023HC DelhiDLHC01025349202307 July 2023Bench: HON'BLE MR. JUSTICE RAJIV SHAKDHER,HON'BLE MR. JUSTICE GIRISH KATHPALIA3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the impugned order dated 13.04.2023, passed by the Assessing Officer (AO) under Section 148A(d) of the Income Tax Act, 1961, was to be set aside. The Court directed the AO to carry out a de novo exercise. This exercise would commence after the AO furnishes the relevant information and documents to the petitioner. The petitioner would then have liberty to file a reply within four weeks of receiving the material. The AO is mandated to deal with all contentions raised by the petitioner in the reply, both on merits and jurisdiction. The relevant material/information is to be furnished to the petitioner within the next two weeks. The Court found that the AO had proceeded to pass the order without providing the necessary material to the petitioner, which was contrary to due process.

What were the facts?

The petitioner, Rajnish Yadav, is alleged to be the beneficiary of accommodation entries provided by one Mr. Sanjay Jain, involving bogus purchases amounting to Rs. 11,98,577/-. The Assessing Officer (AO) issued a notice dated 29.03.2023 under Section 148A(b) of the Income Tax Act, 1961, requiring the petitioner to respond by 10.04.2023. The petitioner filed a response on 04.04.2023, stating that the necessary information/material forming the basis of the allegations had not been provided. Despite this, the AO proceeded to pass an order dated 13.04.2023 under Section 148A(d) of the Act, referencing a statement made by Mr. Sanjay Jain under Section 132(4) of the Act, which the petitioner claims was not furnished to him.

What were the issues?

1. Whether the Assessing Officer (AO) erred in passing an order under Section 148A(d) of the Income Tax Act, 1961, without furnishing the relevant information/documents to the petitioner, specifically the statement made by Mr. Sanjay Jain under Section 132(4) of the Act, thereby violating principles of natural justice? Assessee's Contention: The petitioner argued that the AO passed the order under Section 148A(d) without providing the necessary material, including Mr. Sanjay Jain's statement under Section 132(4), which formed the basis of the allegations. This prevented the petitioner from responding on merits. Revenue's Contention: The revenue, through its learned senior standing counsel, accepted notice and stated that a counter-affidavit was not necessary, indicating readiness to argue based on the available record. No specific arguments were recorded for the revenue on the merits of the petitioner's claim regarding non-furnishing of documents.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148A(b),Section 148A(d),Section 132(4)

AI-generated summary — verify with the full judgment below

W.P.(C) 8943/2023 Page 1 of 3

$~185 * IN THE HIGH COURT OF DELHI AT NEW DELHI %

Date of Decision: 07.07.2023

+ W.P.(C) 8943/2023

RAJNISH YADAV

..... Petitioner

Through: Mr Sanjeev Kumar, Advocate.

versus

INCOME TAX OFFICER, WARD 62 (1), DELHI ..... Respondent Through: Mr Prashant Meharchandani, Sr Standing Counsel.

CORAM:

HON'BLE MR. JUSTICE RAJIV SHAKDHER

HON'BLE MR. JUSTICE GIRISH KATHPALIA [Physical Hearing/Hybrid Hearing (as per request)]

RAJIV SHAKDHER, J (Oral): CM Appl.33920/2023 1. Allowed, subject to just exceptions. W.P.(C) 8943/2023 2. Issue notice. 2.1 Mr Prashant Meharchandani, learned senior standing counsel, accepts notice on behalf of the respondent/revenue. 3. In view of the direction that we propose to pass, Mr Meharchandani says that a counter-affidavit need not be filed, and he will argue the matter based on the record presently available with the court. Digitally Signed By:TARUN RANA Signing Date:11.07.2023 11:40:01 Signature Not Verified

W.P.(C) 8943/2023 Page 2 of 3

4.

The record shows that the principal allegation against the petitioner is that he is the beneficiary of an accommodation entry provided by one, Mr Sanjay Jain. 5. It is alleged that bogus purchases have been made by the petitioner. The value of the bogus purchases has been pegged at Rs.11,98,577/-. 6. In this context, the petitioner was issued a notice dated 29.03.2023 under Section 148A(b) of the Income Tax Act, 1961 [in short, “Act”]. 6.1 Via the said notice, the petitioner was granted time to file a response, albeit up until 10.04.2023. 7. The record shows that on 04.04.2023, the petitioner filed a response, although not on merits, but to indicate to the Assessing Officer (AO) that the necessary information/material, which formed the basis of the allegation levelled against him, had not been furnished to him, 8. It appears that the AO, without furnishing the relevant information/material, proceeded to pass the order dated 13.04.2023 under Section 148A(d) of the Act. 9. A perusal of the said order shows that there is a reference to the statement made by Mr Sanjay Jain under Section 132(4) of the Act. This statement, according to the petitioner, was not furnished to him. 10. Given this position, the best way forward would be to set aside the impugned order dated 13.04.2023, with a direction to the AO to carry out a de novo exercise, after relevant information/documents are furnished to the petitioner. 11. It is ordered accordingly. 12. Accordingly, the impugned order dated 13.04.2023 is set aside. Digitally Signed By:TARUN RANA Signing Date:11.07.2023 11:40:01 Signature Not Verified

W.P.(C) 8943/2023 Page 3 of 3

13.

Liberty is, however, given to the AO to pass a fresh order, as indicated above, after relevant documents/information are furnished to the petitioner before proceeding in the matter. 13.1 Relevant material/information will be furnished to the petitioner within the next two weeks. 13.2 The petitioner will be at liberty thereafter to file a reply. 13.3 A reply will be filed within four (4) weeks of receipt of the relevant material/information. 13.4 The AO will deal with all the contentions that the petitioner may choose to raise in the reply, both on merits, as well as on jurisdiction, in his reply. 14. The writ petition is disposed of, in the aforesaid terms. 15. The parties will act based on digitally signed copy of the order.

RAJIV SHAKDHER, J

GIRISH KATHPALIA, J

JULY 7, 2023/pmc

Digitally Signed By:TARUN RANA Signing Date:11.07.2023 11:40:01 Signature Not Verified

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