Case Law Details
Raj Jain Vs ITO (Delhi High Court)
Introduction: In a notable ruling, the Delhi High Court has reversed a reassessment order against Raj Jain, a case instigated by misinformation concerning a Permanent Account Number (PAN). The ruling underlines the importance of correct and timely information in tax-related matters.
Analysis: The case, linked to the Assessment Year (AY) 2016-17, revolves around the claim that reassessment proceedings were initiated against the petitioner based on erroneous information. The contention was rooted in the alleged sale of an immovable property located in Mumbai, a claim disputed by the petitioner. The source of the misinformation is purported to be an old PAN allocated to the petitioner, which had not been in use since 1999.
The court was shown evidence of a newly assigned PAN to the petitioner. The reassessment, according to prima facie evidence, was instigated due to misinformation given to the Assessing Officer (AO). The court has consequently set aside the reassessment order issued under Section 148A(d) and the notice under Section 148 of the Income Tax Act, 1961.
However, the court has allowed the AO to proceed with the next steps, provided the relevant material/information is supplied to the petitioner. Furthermore, the petitioner must be given the opportunity to respond and be heard before a new order is passed.
Conclusion: This case highlights the significance of accurate data, especially in tax-related cases. The High Court’s ruling is a reminder of the potential complications that can arise from the use of outdated or incorrect information, as seen with the misused PAN in this case. It emphasizes the necessity for authorities to rely on up-to-date and accurate data to avoid errors in judgement and unnecessary legal complications.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. Allowed, subject to just exceptions.
W.P.(C) 9416/2023 & CM No.35906/2023 [Application filed on behalf of the petitioner seeking interim relief]
2. Issue notice.
2.1 Mr Sanjay Kumar, learned senior standing counsel, accepts notice on behalf of the respondents/revenue.
3. Given the directions that we propose to issue, Mr Kumar says counter-affidavit need not be filed and he will argue the matter based on the record presently available with the Court.
3.1 Therefore, with the consent of the learned counsels for the parties, the writ petition is taken up for hearing and final disposal at this stage itself.
4. This writ petition concerns Assessment Year (AY) 2016-17.
5. The principal grievance of the petitioner is that reassessment proceedings have been triggered against her based on a complete misinformation.
6. The allegation levelled against the petitioner is that she sold the subject immovable property, which is located in Mumbai.
7. Counsel for the petitioner says that the source of the misinformation is embedded in the old Permanent Account Number (PAN) allocated to the petitioner, which has been in disuse since 1999.
8. In support of the plea that a new PAN was allocated to the petitioner, our attention is being drawn to Page 64 of the case file (typed copy at page 64/A).
9. The record shows that the old PAN allocated to the petitioner is AAHPJ2938F, while the new PAN allocated to the petitioner is ABUPJ6113A.
10. It is asserted on behalf of the petitioner that she is not the owner of any immovable property located in Mumbai.
11. Prima facie, it appears that the reassessment qua the petitioner was triggered because of misinformation that was provided to the Assessing Officer (AO. Thus, whether or not the transaction concerning the subject immovable property is related to the petitioner, would require closer examination by the AO.
12. Accordingly, the impugned order dated 17.04.2023 passed under Section 148A(d) of the Income Tax Act, 1961 [in short, “the Act”] is set aside.
12.1 Consequently, the impugned notice issued under 148 of the Act is also set aside.
13. The AO, however, will be at liberty to take the next steps in law, from the stage of the notice dated 31.03.2023 issued under Section 148A(b) of the Act, after providing the relevant material/information to the petitioner with regard to the subject immovable property.
13.1 We are told that the petitioner has time and again asked for copy of the sale deed, which is not being furnished by the AO.
14. In case the relevant material/information is supplied, the petitioner will be given an opportunity to file a response. Adequate time will be given for that purpose.
15. Furthermore, the AO will also accord hearing to the petitioner before passing the speaking order.
16. The writ petition is disposed of, in the aforesaid terms.
17. Resultantly, the interlocutory applications shall stand closed.
18. Parties will act based on the digitally signed copy of the order.
