Neeraj Bharadwaj Vs ACIT (Delhi High Court)
Delhi High Court, in its recent judgement delivered by Hon’ble Mr. Justice Bakhru and Hon’ble Mr. Justice Tejas Karia, discussed the validity of notices issued under Section 153C of the Income Tax Act, 1961.
Background of the case :
The search operation was carried out under Section 132 of the Act at the premises of Moser Baer and related entities. Mr. Bhardwaj was not the subject of the search but is related to one of Moser Baer’s promoters. During the search, the Revenue discovered certain documents relating to land purchases at Okhla Phase-III, New Delhi.
According to the Revenue, these documents suggested that Mr. Bhardwaj had purchased agricultural lands in December 2013 in Gurgaon, and had allegedly undervalued the transaction in official sale deeds while paying large portions of the price in cash, which is unaccounted money.
A Satisfaction Note was then prepared by the AO of the searched party and another by the AO of Mr. Bhardwaj, both dated 06.07.2023, indicating that:
- The documents show that the actual consideration paid was much higher than what was recorded in the sale deeds.
- The difference (approximately ₹7.81 crores) was allegedly paid in cash.
- Hence, it was claimed that this represented undisclosed income and justified reassessment under Section 153C.
However, all these transactions were from December 2013 to January 2014, meaning they relate to FY 2013-14, which corresponds to AY 2014-15, not to the years for which reassessment notices were issued (AYs 2015-16 to 2020-21).
Issue :
