Case Law Details
Darpan Kohli Vs ACIT (Delhi High Court)
Introduction: The Delhi High Court has recently delivered a judgment in the case of Darpan Kohli Vs ACIT, ruling in favor of the petitioner. The core contention was related to a penalty notice issued to the petitioner.
Background: The case revolves around a show-cause notice, dated 11.07.2023, under Section 271F of the Income Tax Act, 1961. This notice pertained to the imposition of a penalty for the Assessment Year 2017-18.
Representation: Mr. Sunil Agarwal, the learned senior standing counsel, stood in representation of the respondents/revenue. On the other hand, Mr. M Sufian Siddiqui represented the petitioner, Darpan Kohli.
Major Point of Contention: The crux of the argument from the petitioner’s side was that the assessment order, which formed the basis of the impugned penalty notice, had previously been set aside by a coordinate Bench of the Delhi High Court. This prior judgment was dated 31.05.2023 for W.P.(C) no.7904/2023.
Court’s Observations: The court acknowledged that the assessment order dated 09.05.2023 had indeed been negated, as outlined in the order from 31.05.2023. Mr. Agarwal, representing the revenue, did not dispute this position.
Judgment: Given the circumstances and the prior setting aside of the assessment order, the High Court decided to set aside the show-cause notice dated 11.07.2023. However, the court allowed some liberty to the Assessing Officer, enabling him to take further actions in alignment with the law.
Implications: This ruling has implications on the power and scope of penalty notices, especially when they are based on previously nullified assessment orders. Parties involved have been directed to act based on the digitally signed copy of this order.
Conclusion: In the light of the evidence and the prior court order, the Delhi High Court deemed it fit to quash the penalty notice against Darpan Kohli. This case emphasizes the importance of adhering to legal precedents and the foundational validity of notices and orders.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. Allowed, subject to just exceptions.
W. P.(C) 6036/2021
2. Issue notice.
2.1. Mr Sunil Agarwal, learned senior standing counsel, accepts notice on behalf of the respondents/revenue.
3. In view of the directions that we intend to pass, Mr Agarwal says that he need not file a counter-affidavit in the matter and he will rely on the documents presently available with the court.
4. 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.
5. This petition concerns Assessment Year (AY) 2017-18.
6. The petitioner has approached this court against the show-cause notice dated 11.07.2023 issued under Section 271F of the Income Tax Act, 1961 [in short, “Act”] for imposition of penalty.
7. Mr M Sufian Siddiqui, who appears on behalf of the petitioner, says that what has been lost sight of is that the assessment order on the back of which impugned penalty notice has been issued, was set aside by a coordinate Bench of this court via order dated 31.05.2023 passed in W.P.(C) no.7904/2023.
8. To be noted, via the said order, we had set aside the assessment order dated 09.05.2023, in terms set out in the order dated 31.05.2023.
8.1. This position is not disputed by Mr Agarwal.
9. Accordingly, the impugned show-cause notice dated 11.07.2023 is set aside.
10. Liberty is, however, given to the Assessing Officer (AO) to take the next steps, in accordance with the law.
11. The writ petition is disposed of, in the aforesaid terms.
12. Parties will act based on the digitally signed copy of the order.
