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2024 Supreme(Online)(DEL) 10983
HIGH COURT OF DELHI
Yashwant Varma, Purushaindra Kumar Kaurav, JJ
MAHABIR SINGH JOON – Appellant
Versus
THE INCOME TAX OFFICER & ANR. – Respondent
W.P.(C)-7808/2023
Mr. Vineet Garg, Adv., Mr. Puneet Rai, SSC, Mr. Ashvini Kumar, Mr. Rishabh Nangia, Advs.
Service of notice at the registered address fulfills the principles of natural justice, and the petitioner has an alternative remedy to challenge the assessment order.
Headnote:(A) Income Tax Act, 1961 - Sections 148A(b) and 148A(d) - Challenge to assessment proceedings for AY 2016-17 - Petitioner contended that show cause notice was not served, violating principles of natural justice - Revenue asserted proper service via speed post - Court found service at the registered address sufficient, dismissing the petition. (Paras 1-18)
(B) Natural Justice - The requirement of natural justice is fulfilled if the notice is served at the admitted address, irrespective of the method of service. (Paras 12-15)
(C) Alternative Remedy - The petitioner has an alternative remedy to challenge the assessment order. (Paras 16-17)
Facts of the case:
The petitioner, an agriculturist, did not file income tax returns for AY 2016-17, claiming agricultural income is not taxable. A notice was issued under Section 148A(b) regarding unexplained cash deposits of INR 53,55,000/- in the petitioner’s bank account, which the petitioner claimed was not served.
Findings of Court:
The court found that the notice was duly served at the petitioner’s registered address and that the principles of natural justice were upheld.
Issues: The main issues were whether the notice under Section 148A(b) was served and if the principles of natural justice were violated.
Ratio Decidendi: The court ruled that service at the registered address suffices for fulfilling the principles of natural justice, and the petitioner has an alternative remedy to challenge the assessment order.
Result: Writ petition dismissed.
PURUSHAINDRA KUMAR KAURAV, J.
1. The petitioner in the instant writ petition is essentially aggrieved by an order dated 27 March 2023 passed by the Revenue under Section 148A(d) of the Income Tax Act, 1961 ["Act"]. He also challenges consequential initiation of assessment proceedings relevant to Assessment Year ["AY"] 2016-17.
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2. The challenge is laid on the foundation that the show cause notice issued under Section 148A(b) of the Act was not served upon the petitioner. According to the petitioner, in the absence of any service of the show cause notice, no reply could be filed and therefore, the impugned order under Section 148(A)(d) of the Act is liable to be set aside, as it stood against the principles of natural justice.
3. The facts, as borne out from the petition, indicate that the petitioner is an individual who claims to be an agriculturist and had not filed any income tax return for the AY 2016-17 on the pretext that income earned from agriculture is not chargeable to tax.
4. On 15 March 2023, notice under Section 148A(b) of the Act is stated to have been issued to the petitioner asserting therein that, on a perusal of the information as reported on Insight Portal of the Revenue, during financial year 2015-16 (relevant AY 2016-17), the petitioner had entered into a transaction of cash deposit amounting to INR 53,55,000/- in his savings account. It is argued by the petitioner that the aforesaid notice was never served upon him.
5. Since there was no reply to the said show cause notice, an order under Section 148A(d) of the Act came to be passed on 27 March 2023.
Simultaneously, notice under Section 148A of the Act was also issued on the even date. The following recitals have been made in the order dated 27 March 2023:-
- "Order under clause (d) of section 148A of the Income-tax Act.1961 Page 3 of 10
1. Background The assessee is an individual. The assessee has not filed ITR for AY 2016-17.
2. Information received
2.1 In this case information has been received through Insight Portal of the Income Tax Department under NMS/RMS category that during the AY 2016-17 the assessee has entered into following financial transactions:
- S.No. Information Type Source/Bank Amount(Rs)
1. Cash Deposit in Saving Account Sarva Haryana Gramin Bank 53,55,000/- Total 53,55,000/-
3. Sarva Haryana Gramin Bank, Rohtak which in response to it submitted online reply by attaching bank statement of the assessee.
Further, show cause notice u/s 148A(b) of the Income Tax Act, 1961 , dated - 15.03.2023 was issued to the assessee electronically through ITBA Portal providing him/her the information/material mentioned in para 2.1 above. The notice has been delivered at the mail mentioned in the PAN database and also notice has been sent through Speed Post with tracking 10 No. ED899170251IN. The compliance date of the notice u/s 148A(b) was 22.03.2023.
4. In response to the above notice assessee did not filed any response or reply.
5. Findings/Comments of AO It is observed from the bank statement of the assessee has deposited cash amounting to Rs. 53,55,000/- which is un-explained money. Hence, it requires to be verified and examined.
6. Further, the requirements to initiate proceedings u/s 147 of the Income Tax Act, 1961 as provided by sections 148A r.w.s. 148 of the Act have been duly followed and due prior approval of the Page 4 of 10 specified authority as provided u/s 151 of the Act has been taken during various steps of the procedure entailed in section 148A of the Act.
7. In view of the above, provisions of Section 147/148 of the Income tax Act, 1961 are applicable to the facts of this case for the assessment year under consideration as per analysis and material available on record has led to formation of belief that there is an escapement of income to the tune of Rs. 53,55,000/- from taxation. Hence, it is a fit case for issuance of notice u/s 148 of the Income Tax Act, 1961 .
8. This Order is being passed with t
