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DELHI HIGH COURT
MANMOHAN, MANMEET PRITAM SINGH ARORA
Rise Projects Private Limited – Appellant
Versus
Assistant Commissioner of Income Tax – Respondent
| Table of Content |
|---|
| 1. challenge to income tax order and notice (Para 1 , 2) |
| 2. arguments against reassessment initiation (Para 3 , 4) |
| 3. acknowledgment of procedural oversights (Para 5 , 6) |
| 4. remand for fresh consideration of assessment (Para 7) |
JUDGMENT
Manmohan, J. (Oral)
CM APPL.39591/2022 (exemption)
Allowed, subject to all just exceptions.
Accordingly, the application stands disposed of.
W.P.(C) 13076/2022 & CM APPL.39590/2022
1. Present writ petition has been filed challenging the order passed under Section 148A(d) of the Income Tax Act, 1961 [`the Act'] and the notice issued under Section 148 of the Act both dated 15th July, 2022 for the Assessment Year 2016-17.
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 24th May, 2022 under Section 148A(b) of the Act alleging that Petitioner had taken accommodation entries of Rs.99,00,000/- from a bogus company controlled and operated by an established entry provider, namely, Mr.Himanshu Verma and it had purchased immovable property of Rs.13,10,58,000/- sources of which were not explained.
Reassessment under Income Tax must be based on tangible evidence, not mere change of opinion; failure to consider a party's arguments is a procedural lapse warranting remand.
Reassessment orders under the Income Tax Act must provide specific details regarding allegations to ensure due process and procedural fairness.
Court emphasized that reassessment notices must consider all disclosures made by the taxpayer, reaffirming the principle of natural justice when reviewing prior returns.
Second notice under Section 148A(b) is invalid when an initial notice under Section 148 has already been served; Supreme Court directions pertain to a different timeframe and do not apply.
Reassessment proceedings are invalid if initiated against a non-existent entity and without considering the taxpayer's response, breaching principles of natural justice.
Natural justice is violated when a party is not given a chance to explain their case before adverse decisions are made in tax reassessment processes.
A show cause notice under Section 148A(b) of the Income Tax Act must contain specific allegations of income escapement; its absence renders the assessment invalid.
Orders based on vague allegations without specific details violate the right to a fair hearing under tax law.
The issuance of a reassessment notice must adhere to principles of natural justice, including consideration of all relevant submissions by the assessee.
The court emphasized the importance of providing all relevant material and documents to the petitioner in a fair and balanced manner, ensuring that the rights and contentions of all parties are left ....
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