Delhi HC dismisses Writ Petition challenging Section 153C order

Sunita Goel Vs DCIT (Delhi High Court)

In the case of Sunita Goel vs. DCIT, the Delhi High Court addressed a writ petition challenging an order passed under Section 153C of the Income Tax Act, 1961. The order in question added an amount of ₹1,62,20,000 to the total income of the assessee for the Assessment Year 2014-15. Here’s a detailed summary of the judgment:

1. Background: The assessee filed her Income Tax return for AY 2014-15 on 07.11.2014, declaring an income of ₹39,76,435. Later, a search operation was conducted at a property in Pitampura, New Delhi, which revealed that the property was sold to the assessee for ₹2,61,70,000, out of which ₹1,62,20,000 was received in cash.
2. Assessment Proceedings: An assessment order was passed against the seller of the property, Mr. Hemant Kumar Sharma, adding ₹1,62,20,000 as unexplained money and ₹21,12,141 as Long Term Capital Gains to his income. Subsequently, assessment proceedings were initiated against the assessee under Section 153C of the Act.
3. Contentions: The counsel for the assessee argued that there was a violation of principles of natural justice as ample opportunity for hearing was not provided. He also pointed out the delay in initiating the proceedings and challenged the maintainability of the writ petition.
4. Revenue’s Response: The Revenue argued that the assessee had been given sufficient opportunities to respond, and the assessment order was passed after duly considering the assessee’s reply. They opposed invoking writ jurisdiction, citing an alternate efficacious remedy available.
5. Court’s Analysis:
   • The court analyzed whether the assessee was provided with a fair opportunity of hearing and whether the AO duly considered the assessee’s reply.
   • It was observed that the assessee was given multiple opportunities to respond, including notices and questionnaires, and a satisfaction note was provided before passing the order.
   • The court also considered precedents regarding the timeframe for initiating proceedings under Section 153C and concluded that the delay in this case was not unreasonable.
   • On the question of maintainability of the writ petition, the court referred to principles governing writ jurisdiction in the presence of an alternate remedy. It emphasized that writ jurisdiction can be invoked in specific circumstances, such as violation of fundamental rights or lack of jurisdiction, none of which applied in this case.
6. Decision: The court dismissed the writ petition, stating that there was no violation of natural justice and no grounds to invoke writ jurisdiction. It clarified that the observations made should not be construed as an expression on the merits of the case, and the parties were free to pursue other legal remedies.

In summary, the Delhi High Court upheld the assessment order passed under Section 153C of the Income Tax Act, 1961, finding no grounds for intervention through a writ petition. The judgment emphasized the importance of providing a fair opportunity for the assessee to be heard and clarified the circumstances under which writ jurisdiction could be invoked.