Faiz Wahab Vs ITO (Madras High Court)
In Faiz Wahab vs Income Tax Officer, the Madras High Court dealt with a writ petition challenging the assessment order dated 26 February 2024, issued under Section 147 read with Section 144 of the Income Tax Act, 1961. The petitioner had been assessed for alleged unexplained income based on the amount shown in a sale agreement, which the Assessing Officer treated as taxable income after the petitioner failed to respond to multiple notices issued during reassessment proceedings. The petitioner contended that the assessment was erroneous, as the transaction related to a real estate purchase that did not materialize, and the sale advance had been refunded.
The petitioner’s counsel submitted that he was a bona fide investor in a real estate project promoted by M/s Omkar Ventures Pvt. Ltd. in Mumbai and had secured a favorable order from the Maharashtra Real Estate Regulatory Authority (RERA) on 30 May 2023 directing refund of the amount paid as advance. It was argued that despite this refund, the Assessing Officer treated the amount as unexplained income, resulting in a tax demand of ₹2,36,40,710. The counsel further stated that an appeal against the impugned assessment order had already been filed before the Commissioner of Income Tax (Appeals) under Section 246A of the Act on 16 September 2024. However, no application under Section 220(6) for stay of demand had been filed.
