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IN THE HIGH COURT OF DELHI AT NEW DELHI
Rajiv Shakdher, Girish Kathpalia, JJ.
Deepak Jain – Appellant
Versus
Income Tax Officer Ward 44(1), Delhi & Ors. – Respondents
W.P.(C) 5654 of 2023 & CM 22146 of 2023
Decided On : 12-05-2023
Income Tax Act - Assessment Year 2017-18 - The court quashed the impugned notice and order issued under Section 148A(b) and Section 148A(d) of the Income Tax Act, 1961 as the reassessment proceedings were flawed and did not have the approval of the specified authority. The escaped income was below the threshold requirement provided under Section 149(1)(b) of the Act, and more than three years had elapsed since the end of the Assessment Year.
Fact of the Case:
The writ petition concerns Assessment Year (AY) 2017-18. The reassessment proceedings were challenged on the grounds of lack of approval of the specified authority and the escaped income being below the threshold requirement.
Finding of the Court:
The court accepted the assertions made in the writ petition as correct, as no counter-affidavit was filed by the department. Consequently, the court allowed the prayer made in the petition and quashed the impugned notice and order, along with the consequential notice and interim order.
Issues: The issues revolved around the validity of the reassessment proceedings, lack of approval of the specified authority, and the threshold requirement for escaped income under the Income Tax Act.
Ratio Decidendi: The court's decision was influenced by the flawed reassessment proceedings, the acceptance of the escaped income being below the threshold requirement, and the absence of a counter-affidavit from the department.
Final Decision: The court disposed of the writ petition by allowing the prayer made in the petition and quashing the impugned notice and order, along with the consequential notice and interim order.
JUDGMENT
[Physical Hearing/Hybrid Hearing (as per request)]
Rajiv Shakdher, J. (Oral)
1. On 02.05.2023, we had heard the matter briefly, when we had recorded the following broad contour, concerning the matter at hand:
"2. This writ petition concerns Assessment Year (AY) 2017-18. 3. Mr Nitin Gulati, who appears on behalf of the petitioner, says that the reassessment proceedings are flawed for the following reasons:
(i) First, the proceedings do not have the approval of the specified authority.
(ii) Second, even according to the respondents/revenue, the escaped income is Rs.30,70,526/-. This is below Rs.50,00,000/-, which is the threshold requirement provided under Section 149(1)(b) of the Income Tax Act, 1961 [in short, "Act"]."
2. Mr Aseem Chawla, learned senior standing counsel, who appears on behalf of the respondents/revenue, cannot but accept that the escaped income, as noted by us on 02.05.2023, is below Rs.50 lakhs.
3. It is also obvious that more than three years have elapsed, since the end of the Assessment Year (AY) in issue.
4. We had indicated on 02.05.2023 that if the department were to give instructions to resist the petition, a counter-affidavit should be filed. No counter-affidavit has been filed.
5. Therefore, we will have to accept, for the moment, that the assertions made in the writ petition on facts are correct.
6. Mr Chawla cannot but accept that if the facts as set out in the petition are correct, then the reassessment proceedings cannot progress further.
7. Accordingly, prayer made in the petition is allowed.
8. Consequently, the impugned notice dated 21.05.2022 issued under Section 148A(b) and the order dated 28.07.2022 passed under Section 148A(d) of the Income Tax Act, 1961 [in short, "Act"] are quashed.
8.1. The consequential notice of even date i.e., 28.07.2022, issued under Section 148 of the Act is also quashed.
9. Interim order dated 02.05.2023 shall also stand vacated. Interlocutory application stands closed.
10. The writ petition is disposed of, in the aforesaid terms.
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