In a recent judgement, the Delhi High Court set aside the reassessment order under the Income Tax Act 1961. On the typographical error, the reassessment was triggered inadvertently in the account number of the applicant taxpayer.
M/S Tirupati Trading Corporation, the applicant contended the order issued under Section 148A(d) of the Income Tax Act, 1961, and the resulting notice issued under Section 148 of the Act, concerning Assessment Year (AY) 2016-17.
On behalf of the applicant Mr C.S. Aggarwal, senior counsel, contended that reassessment proceedings have started without any data and material being provided to the applicant.
As per the record the notice in the first instance was been provided to the applicant under Section 148 of the Act on 07.04.2021. As the new regime was inserted, a fresh notice under Section 148A(b) on 27.05.2022 was given to the petitioner.
Important: Delhi HC Removes Notice Due to Failure to Provide Clear Explanation for Charges
Against the applicant, the allegation is that it has obtained the fake entry from the entry provider i.e. Mr Ramesh Kumar Bagri. It was proof that in the suspicious transactions related to the heading “information available and action initiated”, concerning Mr Bagri, there is no connection with the petitioner.
On behalf of the respondent/revenue Mr Abhishek Maratha, who appeared, has placed before us the facts obtained via the assessing officer and argued connection is there with the entity going by the name Tirupati Trading Corporation and against the expressed entity it is shown that an amount equivalent to Rs.1,76,00,000/- has been credited.
As per the customer request a certificate has been provided without any risk and responsibility of the bank officials. The amount of Rs.1,76,00,000 was neither remitted nor credited from the applicant’s account maintained through it, CBI mentioned.
Read Also: Bombay HC Cancels Re-assessment Order in the Absence of Any New Information
It was revealed that the issues could be on the grounds of the typographical error at that time. Since no details or material availability was there with the related authority to trigger the proceedings under Section 148/148A(d) of the Act the court has allowed 4 weeks for the respondent/ revenue to file the counter-affidavit in the case.
On 16.12.2022 the interim order issued was made absolute at the time of the pendency of the writ petition and the pending interlocutory application was disposed of. No counter-affidavit has been lodged with the Registry. Mr Abhishek Maratha, senior standing counsel, appeared on behalf of the respondent/revenue and has placed before us a hard copy of the counter-affidavit that has been made for being lodged with the court.
A mistake has been made in initiating reassessment proceedings against the petitioner, as per the counter affidavit. Mr Maratha could not however accept the reassessment against the applicant and could not be carried on, as per the assertions made in the counter affidavit.
Under Section 148A(d) and consequential notice issued under Section 148 of the Income Tax Act, 1961 a division bench of Justice Rajiv Shakdher and Justice Girish Kathpalia set aside the passed impugned order.
| Case Title | M/S Tirupati Trading Corporation Vs. Assistant Commissioner of Income Tax |
| Citation | W.P.(C) 15017/2022 |
| Date | 13.10.2023 |
| Delhi High Court | Read Order |
