Boutique International Pvt. Ltd. vs Deputy Commissioner of Income Tax

Headnote Court Copy Facts Arguments Court observation Judicial Analysis Case Map Category Hierarchy Table of Content

IN THE HIGH COURT OF DELHI
Manmohan, Manmeet Pritam Singh Arora, JJ.
Boutique International Pvt. Ltd. - Appellant
Versus
Deputy Commissioner of Income Tax - Respondent
W.P.(C) 13616 of 2022, CM Appl. 41494 of 2022 & CM Appl. 41495 of 2022
Decided On : 07-10-2022

Important Points

Reassessment orders under the Income Tax Act must provide specific details regarding allegations to ensure due process and procedural fairness.

Subject

Tax Law - Income Tax - Reassessment

Headnote

(A) Income Tax Act, 1961 - Sections 148A(d) and 148 - Challenge to the order passed under Section 148A(d) and notice under Section 148 concerning bogus accommodation entries. - Court emphasized the lack of specific details regarding bank accounts in the order and emphasized the need for the Assessing Officer to review the matter afresh. (Paras 1-6)

(B) Procedural Fairness - The decision must be based on specified facts concerning alleged transactions; failure to provide details undermines the validity of reassessment. (Paras 4-5)

Facts of the case:
The Petitioner challenged the order under Section 148A(d) alleging that the information relied upon for reassessment was inaccurate since no transactions with the named individuals took place.

Findings of Court:
The impugned order and notice were set aside; the matter was remanded back to the Assessing Officer for proper review and response.

Issues: The main issues involved were whether the allegations were substantiated with proper details, and procedural fairness in the reassessment process.

Ratio Decidendi: The court held that an order under Section 148A(d) must clearly enumerate findings and not proceed without substantiated claims; due process in reassessment is paramount.

Result: Writ petition allowed, and the matter remanded to the Assessing Officer.

Table of Content
1. writ petition challenges reassessment order. (Para 1 , 2)
2. parties present conflicting arguments regarding evidence. (Para 3 , 4)
3. court finds order lacks necessary specifics. (Para 5)
4. impugned order is set aside; remand for reconsideration. (Para 6)
5. writ petition disposed; parties' rights preserved. (Para 7)

JUDGMENT

Manmohan, J. (Oral)

CM APPL. 41495/2022 (for exemption)

Exemption allowed, subject to all just exceptions.

Accordingly, this application stands disposed of.

W.P.(C) 13616/2022, CM APPL. 41494/2022 (for stay)

1. Present writ petition has been filed challenging the order passed under Section 148A(d) of the Income Tax Act, 1961, [hereinafter referred to as `the Act'] and the notice issued under Section 148 of the Act both dated 22nd July, 2022 for Assessment Year [AY] 2017-18.

2. Learned counsel for the Petitioner states that pursuant to the directions of the Supreme Court in Union of India v. Ashish Agarwal, 2022 SCC OnLine SC 543, the Petitioner was issued a letter dated 26th May, 2022, under Section 148A(b) of the Act alleging that Petitioner had taken bogus accommodation entries from entities controlled by Mr. Himanshu Verma. He states that the Petitioner filed a detailed reply dated 3rd June, 2022, wherein it was stated that the information on the basis of which the reassessment proceedings were sought to be initiated were incorrect as the Petitioner had never entered into any transactions with Mr. Himanshu Verma or any entities controlled by him. He further states that the information such as the pin-code and the mobile number of the assessee did not correspond with those of the Petitioner.

3. Learned counsel for the Petitioner emphasises that the impugned order under Section 148A(d) was passed without taking into consideration any of the contentions raised by the Petitioner.

4. Per contra, learned counsel for the Respondent/Revenues states that there is information available on the insight portal from a credible source which discloses modus operandi of tax evasion. He states that the Petitioner's names along with his PAN is mentioned in the information relied upon against the transactions of Rs.25 Lacs with M/s Kanhaiya Impex Pvt Ltd and Rs.68 Lacs with M/s Upaj leasing and Finance Co. Pvt Ltd.

5. Having heard learned counsel for the parties, this Court finds that the information furnished to the Petitioner and the impugned order do not specify in which bank account or account number, the alleged amount have been received by the Petitioner. Though the impugned order states that the asset is represented by bogus accommodation entries in the form of bank deposits, yet no details of any such deposit have been mentioned in the impugned order.

6. Consequently, the impugned order passed under Section 148A(d) of the Act as well as the notice issued under Section 148 of the Act both dated 22nd July, 2022, for AY 2017-18 are set aside and the matter is remanded back to the Assessing Officer for a fresh determination. In the interest of justice, this Court permits the Assessing Officer to supply additional information, if any, in his possession to the Petitioner-Assessee within four weeks. The Petitioner-Assessee shall be at liberty to file an additional response within four weeks thereafter. The Assessing Officer shall subsequently decide the matter in accordance with law within four weeks.

7. With the aforesaid directions, the present writ petition along with the pending application stand disposed of. This Court clarifies that the rights and contentions of all the parties are left open.