Case Law Details
Rajnish Yadav Vs ITO (Delhi High Court)
Introduction: In a significant ruling, the Delhi High Court has directed a fresh adjudication in the case of Rajnish Yadav Vs ITO. The Income Tax Department alleged that Yadav benefited from accommodation entries provided by one Mr Sanjay Jain and made bogus purchases, which totalled up to Rs. 11,98,577/-. The crux of the case lies in a notice issued under Section 148A(b) of the Income Tax Act, 1961, for which the court found that relevant material had not been supplied to Yadav, hampering his ability to respond effectively.
Analysis: This judgment reemphasizes the necessity for transparency and fairness in proceedings of this nature. The High Court noted that the Assessing Officer (AO) did not furnish the relevant information or material that was the basis for the allegations against Yadav. This lack of crucial information led to a decision on 13.04.2023 under Section 148A(d) of the Act, which was deemed inappropriate.
The judgment also draws attention to the reference made to a statement by Mr Sanjay Jain under Section 132(4) of the Act. This statement was allegedly not provided to the petitioner, further reinforcing the grounds for setting aside the order.
Conclusion: In light of the above, the Delhi High Court decided to set aside the impugned order and direct the AO to carry out a de novo exercise. This case sets a precedent for upholding the principles of natural justice and affirms that proper procedure, including the furnishing of relevant documents, is essential in such investigations. It is now upon the AO to pass a fresh order, after providing all relevant documents and information to Yadav, who would then be allowed to reply, ensuring a fair and just trial.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
CM Appl.33920/2023
1. Allowed, subject to just exceptions.
P.(C) 8943/2023
2. Issue notice.
2.1 Mr Prashant Meharchandani, learned senior standing counsel, accepts notice on behalf of the respondent/revenue.
3. In view of the direction that we propose to pass, Mr Meharchandani says that a counter-affidavit need not be filed, and he will argue the matter based on the record presently available with the court.
4. The record shows that the principal allegation against the petitioner is that he is the beneficiary of an accommodation entry provided by one, Mr Sanjay Jain.
5. It is alleged that bogus purchases have been made by the petitioner. The value of the bogus purchases has been pegged at Rs. 11,98,577/-.
6. In this context, the petitioner was issued a notice dated 29.03.2023 under Section 148A(b) of the Income Tax Act, 1961 [in short, “Act”].
6.1 Via the said notice, the petitioner was granted time to file a response, albeit up until 10.04.2023.
7. The record shows that on 04.04.2023, the petitioner filed a response, although not on merits, but to indicate to the Assessing Officer (AO) that the necessary information/material, which formed the basis of the allegation levelled against him, had not been furnished to him,
8. It appears that the AO, without furnishing the relevant information/material, proceeded to pass the order dated 13.04.2023 under Section 148A(d) of the Act.
9. A perusal of the said order shows that there is a reference to the statement made by Mr Sanjay Jain under Section 132(4) of the Act. This statement, according to the petitioner, was not furnished to him.
10. Given this position, the best way forward would be to set aside the impugned order dated 13.04.2023, with a direction to the AO to carry out a de novo exercise, after relevant information/documents are furnished to the petitioner.
11. It is ordered accordingly.
12. Accordingly, the impugned order dated 13.04.2023 is set aside.
13. Liberty is, however, given to the AO to pass a fresh order, as indicated above, after relevant documents/information are furnished to the petitioner before proceeding in the matter.
13.1 Relevant material/information will be furnished to the petitioner within the next two weeks.
13.2 The petitioner will be at liberty thereafter to file a reply.
13.3 A reply will be filed within four (4) weeks of receipt of the relevant material/information.
13.4 The AO will deal with all the contentions that the petitioner may choose to raise in the reply, both on merits, as well as on jurisdiction, in his reply.
14. The writ petition is disposed of, in the aforesaid terms.
15. The parties will act based on digitally signed copy of the order.