PCIT Vs Capital Power Systems Ltd. (Delhi High Court)
Delhi High Court held that initiation of reassessment proceedings under section 148 of the Income Tax Act liable to be quashed in as much as conditions set out in section 150 of the Income Tax Act not fulfilled.
Facts- A search and seizure operation u/s. 132 of the Act was carried out in the case of Capital Meter Group on 26.06.2006. Sh. Pawan Kumar Bansal was the Chief Executive Officer (CEO) and Director of Capital Power Systems Ltd. (assessee) and Sh. Mahesh Kumar Gupta was another Director of the assessee – which is one of the companies of the Capital Meter Group. During the post-search proceedings, on 01.09.2006, Sh. Pawan Kumar Bansal had submitted a letter, written on the letterhead of assessee, duly signed by him as the CEO of the assessee, wherein an income of ₹7 crores was surrendered and disclosed.
However, in his Return of Income for AY 2007-08, Sh. Pawan Kumar Bansal only disclosed an amount of ₹20 lakhs as undisclosed cash found, and did not include the remaining amount of ₹6.8 crores in his Returned Income. As a result, while passing the final assessment order, the concerned Assessing Officer added the amount of ₹6.8 crores to the income of Sh. Pawan Kumar Bansal – ₹3.35 crores on substantive basis and ₹3.45 crores on protective basis – and ₹3.45 crores in the hands of Sh. Mahesh Kumar Gupta on substantive basis.
