MS RAJ JAIN vs. INCOME TAX OFFICER WARD 35 1 DELHI AND ANR

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W.P.(C)/9416/2023HC DelhiDLHC01026886202318 July 2023Bench: HON'BLE MR. JUSTICE RAJIV SHAKDHER,HON'BLE MR. JUSTICE GIRISH KATHPALIA3 pages
AI SummaryRemanded

What did the High Court hold?

The Delhi High Court set aside the impugned order dated 17.04.2023 passed under Section 148A(d) and the consequential notice issued under Section 148 of the Income Tax Act, 1961. The Court found that, prima facie, the reassessment proceedings against the petitioner appeared to have been triggered due to misinformation provided to the Assessing Officer (AO). The Court reasoned that whether the transaction concerning the immovable property was related to the petitioner required closer examination by the AO. The AO was granted liberty to proceed from the stage of the notice dated 31.03.2023 issued under Section 148A(b). Before taking further steps, the AO was directed to provide the petitioner with the relevant material/information regarding the subject immovable property, including the sale deed, and grant her an opportunity to file a response and a hearing before passing a speaking order. The ratio decidendi is that reassessment proceedings initiated on demonstrably false or misleading information, without proper verification and without providing the assessee with necessary documents for response, are liable to be quashed.

What were the facts?

The petitioner, Ms. Raj Jain, filed a writ petition before the Delhi High Court challenging reassessment proceedings initiated against her for Assessment Year 2016-17. The petitioner's primary grievance was that the reassessment was triggered based on misinformation. She alleged that the information pertained to an old, disused Permanent Account Number (PAN) allocated to her, which was different from her current PAN. The petitioner asserted that she does not own any immovable property in Mumbai, which was the subject of the alleged transaction. The Assessing Officer (AO) had issued a notice under Section 148A(b) and subsequently an order under Section 148A(d) of the Income Tax Act, 1961. The petitioner had requested a copy of the sale deed, which was allegedly not provided.

What were the issues?

1. Whether the reassessment proceedings initiated against the petitioner for AY 2016-17 were based on misinformation, particularly concerning the PAN and ownership of the subject immovable property in Mumbai, thereby vitiating the proceedings under Section 148A of the Income Tax Act, 1961? Assessee's Contention: The petitioner argued that the reassessment was initiated based on misinformation linked to an old, disused PAN (AAHPJ2938F) instead of her current PAN (ABUPJ6113A). She asserted that she does not own any immovable property in Mumbai and is not connected to the transaction that triggered the reassessment. The petitioner also contended that the AO failed to provide her with crucial documents like the sale deed, hindering her ability to respond. Revenue's Contention: The revenue, represented by Mr. Sanjay Kumar, Sr. Standing Counsel, did not file a counter-affidavit and agreed to argue the matter based on the available record, given the directions proposed by the Court. No specific arguments were recorded for the revenue.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148

AI-generated summary — verify with the full judgment below

W.P.(C) 9416/2023

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$~42 * IN THE HIGH COURT OF DELHI AT NEW DELHI %

Decision delivered on: 18.07.2023 + W.P.(C) 9416/2023

MS RAJ JAIN

..... Petitioner

Through: Mr Deepak Singh Thakur, Adv.

versus

INCOME TAX OFFICER WARD 35 1 DELHI AND ANR ..... Respondent Through: Mr Sanjay Kumar, Sr. Standing Counsel with Ms Hemalata Rawat, Jr. 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. 35907/2023 1. Allowed, subject to just exceptions. W.P.(C) 9416/2023 & CM No.35906/2023 [Application filed on behalf of the petitioner seeking interim relief] 2. Issue notice. 2.1 Mr Sanjay Kumar, learned senior standing counsel, accepts notice on behalf of the respondents/revenue. 3. Given the directions that we propose to issue, Mr Kumar says counter-affidavit need not be filed and he will argue the matter based on the record presently available with the Court. Digitally Signed By:NEELAM SHARMA Signing Date:20.07.2023 10:32:57 Signature Not Verified

W.P.(C) 9416/2023

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3.1 Therefore, with the consent of the learned counsels for the parties, the writ petition is taken up for hearing and final disposal at this stage itself. 4. This writ petition concerns Assessment Year (AY) 2016-17. 5. The principal grievance of the petitioner is that reassessment proceedings have been triggered against her based on a complete misinformation. 6. The allegation levelled against the petitioner is that she sold the subject immovable property, which is located in Mumbai. 7. Counsel for the petitioner says that the source of the misinformation is embedded in the old Permanent Account Number (PAN) allocated to the petitioner, which has been in disuse since 1999. 8. In support of the plea that a new PAN was allocated to the petitioner, our attention is being drawn to Page 64 of the case file (typed copy at page 64/A). 9. The record shows that the old PAN allocated to the petitioner is AAHPJ2938F, while the new PAN allocated to the petitioner is ABUPJ6113A. 10. It is asserted on behalf of the petitioner that she is not the owner of any immovable property located in Mumbai. 11. Prima facie, it appears that the reassessment qua the petitioner was triggered because of misinformation that was provided to the Assessing Officer (AO. Thus, whether or not the transaction concerning the subject immovable property is related to the petitioner, would require closer examination by the AO. 12. Accordingly, the impugned order dated 17.04.2023 passed under Section 148A(d) of the Income Tax Act, 1961 [in short, “the Act”] is set Digitally Signed By:NEELAM SHARMA Signing Date:20.07.2023 10:32:57 Signature Not Verified

W.P.(C) 9416/2023

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aside. 12.1 Consequently, the impugned notice issued under 148 of the Act is also set aside. 13. The AO, however, will be at liberty to take the next steps in law, from the stage of the notice dated 31.03.2023 issued under Section 148A(b) of the Act, after providing the relevant material/information to the petitioner with regard to the subject immovable property. 13.1 We are told that the petitioner has time and again asked for copy of the sale deed, which is not being furnished by the AO. 14. In case the relevant material/information is supplied, the petitioner will be given an opportunity to file a response. Adequate time will be given for that purpose. 15. Furthermore, the AO will also accord hearing to the petitioner before passing the speaking order. 16. The writ petition is disposed of, in the aforesaid terms. 17. Resultantly, the interlocutory applications shall stand closed. 18. Parties will act based on the digitally signed copy of the order.

(RAJIV SHAKDHER) JUDGE

(GIRISH KATHPALIA) JUDGE JULY 18, 2023/RY

Click here to check corrigendum, if any Digitally Signed By:NEELAM SHARMA Signing Date:20.07.2023 10:32:57 Signature Not Verified

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