Jindal Saw Ltd. Vs D/ACIT (Delhi High Court)
In the Delhi High Court case Shreya Jain Vs Gaurav Tanwar, the petitioner challenged an income tax reassessment for the assessment year 2018-19. The dispute arose from a notice issued under Section 148A(b) of the Income Tax Act, 1961, followed by an order under Section 148A(d) and a notice under Section 148. The core issue was the inconsistency between the allegations stated in the initial notice and the grounds presented in the subsequent order. The Assessing Officer (AO) initially alleged that the petitioner had an unexplained expenditure of 79,17,086, based on information from 26AS and GST transaction reports. The petitioner responded, clarifying that the amount was not an expenditure but rather income, subject to tax collected at source, and already accounted for in their assessed income.
However, the AO’s order under Section 148A(d) shifted the focus, claiming the same amount represented unexplained income received from the sale of scrap to Mukesh Pitti. This discrepancy formed the basis of the petitioner’s challenge. The petitioner argued that this change in the nature of the allegation prevented them from effectively addressing the AO’s concerns. The Delhi High Court acknowledged the petitioner’s argument, stating that the purpose of the initial notice is to provide the assessee with an opportunity to clarify information suggesting income has escaped assessment. The court found that the variance between the notice and the order deprived the petitioner of this opportunity, as they were essentially responding to two different claims. Furthermore, the court noted that the AO did not consider the petitioner’s explanation that the income in question was already included in their assessed income. Consequently, the High Court set aside the impugned notice and order, clarifying that the AO could issue a fresh notice under Section 148A(b) if legally permissible, based on new information suggesting income has escaped assessment. The petition was disposed of accordingly.
