Delhi High Court - Orders
Dinesh Jindal vs Assistant Commissioner Of Income Tax, ... on 14 September, 2023
Author: Rajiv Shakdher
Bench: Rajiv Shakdher
$~34 & 35
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 12078/2023 & CM Nos.47445-46/2023
DINESH JINDAL ..... Petitioner
Through: Mr Ved Jain, Mr Nischay Kantoor
and Ms Soniya Dodeja, Advs.
versus
ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL
CIRCLE 20, DELHI & ORS. ..... Respondents
Through: Mr Prashant Meharchandani, Sr
Standing Counsel with Mr Akshat
Singh, Standing Counsel.
+ W.P.(C) 12091/2023 & CM Nos.47460-61/2023
DINESH JINDAL ..... Petitioner
Through: Mr Ved Jain, Mr Nischay Kantoor
and Ms Soniya Dodeja, Advs.
versus
ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL
CIRCLE 20, DELHI & ORS. ..... Respondents
Through: Mr Prashant Meharchandani, Sr
Standing Counsel with Mr Akshat
Singh, Standing Counsel.
CORAM:
HON'BLE MR. JUSTICE RAJIV SHAKDHER
HON'BLE MR. JUSTICE GIRISH KATHPALIA
ORDER
% 14.09.2023 [Physical Hearing/Hybrid Hearing (as per request)] CM No.47446/2023 in W.P.(C) 12078/2023 CM No.47461/2023 in W.P.(C) 12091/2023
1. Allowed, subject to the petitioner filing legible copies of the annexures, at least three days before the next date of hearing.
W.P.(C) 12078/2023 & 12091/2023 page 1 of 5 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 19/09/2023 at 21:02:54 W.P.(C) 12078/2023 & CM Nos.47445/2023 W.P.(C) 12091/2023 & CM Nos.47460/2023 [Applications filed on behalf of the petitioner seeking interim relief]
2. These writ petitions concern Assessment Year (AY) 2012-13 [W.P.(C)No.12078/2023] and AY 2013-14 [W.P.(C)No.12091/2023].
3. The record shows that a search action under Section 132 of the Income Tax Act, 1961 [in short, "Act"] was carried out against an entity going by the name Proform Interiors Pvt. Ltd. [in short, "PIPL"]. The search was carried out on 09.02.2022.
4. The record also discloses that two separate notices of even date, i.e., 30.03.2023 were issued under Section 148 of the Act.
5. Insofar as AY 2012-13 is concerned, it is alleged that income amounting to Rs.30,00,000/- had escaped assessment. 5.1 Likewise, as regards AY 2013-14, it is alleged that income amounting to Rs.57,61,500/- has escaped assessment.
6. Mr Ved Jain, who appears on behalf of the petitioner, has drawn our attention to the "proforma for approval by the specified authority", wherein the "reasons for the belief" formed by the Assessing Officer (AO) that income had escaped assessment are noted. The reasons furnished by the AO are identical for both AYs. For the sake of convenience, the relevant extract from AY 2013-14 is set forth hereafter [See Annexure P-3 appended on page 84 of W.P.(C)No.12078/2023 and also Annexure P-3 appended on page 85 of W.P.(C)No.12091/2023]:
W.P.(C) 12078/2023 & 12091/2023 page 2 of 5 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 19/09/2023 at 21:02:54 "Proforma for approval by the Specified Authority xxx xxx xxx
18. Reasons for the After careful examination of specific information available belief that income with this office, the undersigned is deemed to have has escaped information which suggests that the income chargeable to tax assessment. has escaped assessment in the case of the assessee in view of Explanation 2(iv) to the section 148 of the Act. The case of the assessee for AY 2013-14 falls under the category of "income chargeable to tax has escaped assessment for the relevant assessment year" and fulfills the conditions laid down in section 149( l)(b) and l 49(1A) of the Income Tax Act, 1961. Hence, the ibid case is a fit case to be selected for Assessment/ Re-Assessment u/s 147 of the Act.
xxx xxx xxx"
7. Mr Jain says that, apart from anything else, the commencement of the reassessment proceeding against the petitioner is flawed for the reason that the aforesaid extract does not show that the AO arrived at his independent satisfaction as to whether the reassessment proceeding should be triggered against the petitioner, prior to approval of the specified authority. 7.1 In support of this submission, Mr Jain relies upon Clause (iv) of Explanation 2 appended to Section 148 of the Act. 7.2 Furthermore, Mr Jain submits that insofar as the aforementioned AYs are concerned, limitation has already been expired and, therefore, even the amendment brought about to Section 149(1) read with Explanation 1A would not save the impugned action from being declared illegal.
8. On the other hand, Mr Prashant Meharchandani, learned senior standing counsel, who appears on behalf of the respondents/revenue, has drawn our attention to the common order dated 07.06.2023, whereby objections filed by the petitioner to the notice issued under Section 148 of W.P.(C) 12078/2023 & 12091/2023 page 3 of 5 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 19/09/2023 at 21:02:55 the Act were disposed of.
8.1 In particular, Mr Meharchandani has drawn our attention to paragraph 3.1 of the said order and the statement of account concerning the petitioner which is available on page 105 of the case file. It is, therefore, Mr Meharchandani's contention that since the material with regard to cash transactions was available, the reassessment proceedings for the aforementioned AYs were in order.
9. Besides this, Mr Meharchandani also says that Clause (iv) of Explanation 2 appended to Section 148 of the Act only requires the AO to satisfy himself as to whether the information found during search pertains to or concerns the other person [in this case the petitioner].
10. Having heard learned counsel for the parties, according to us, the moot question which arises for consideration is whether the reassessment proceeding which is triggered by the AO can be defended based on the order passed disposing the objections.
11. According to us, prima facie, it seems that if this argument is accepted, it would amount to putting the cart before the horse. Annexure P- 3, to which we have made a reference above, discloses that apart from alluding to the information available with the office (and without saying that that information was) and taking recourse to Explanation 2(iv) appended to Section 148 of the Act, nothing has been indicated by the AO. Therefore, whether or not he was satisfied that the information received by him required commencement of reassessment proceedings is not discernible from what is noted by the AO.
W.P.(C) 12078/2023 & 12091/2023 page 4 of 5 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 19/09/2023 at 21:02:55
12. Significantly, even the broad particulars of the available information were also adverted to by the AO. Therefore, in our view, the matter requires further examination.
13. Issue notice.
13.1 Mr Prashant Meharchandani, learned senior standing counsel, accepts notice on behalf of the respondents/revenue.
14. A counter-affidavit will be filed within six weeks. 14.1 Rejoinder thereto, if any, will be filed at least five days before the next date of hearing.
15. Since the issue raised by the petitioner goes to the root of the matter, in our opinion, the reassessment proceedings cannot continue, till further directions of the court.
15.1 It is ordered accordingly.
16. List the above-captioned matters on 04.03.2024.
17. Parties will act based on the digitally signed copy of the order.
RAJIV SHAKDHER, J GIRISH KATHPALIA, J SEPTEMBER 14, 2023 aj Click here to check corrigendum, if any W.P.(C) 12078/2023 & 12091/2023 page 5 of 5 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 19/09/2023 at 21:02:55