The Delhi High Court in a recent judgement set aside the reassessment order under the Income Tax Act, 1961. The Reassessment was triggered mistakenly on a typographical error in the account number of the petitioner assessee. M/S Tirupati Trading Corporation, the petitioner challenged the order passed under Section 148A(d) of the Income Tax Act, 1961 [“the Act”] and the consequent notice issued under Section 148 of the Act, concerning Assessment Year (AY) 2016-17. Mr C.S. Aggarwal, senior counsel, who appeared on behalf of the petitioner argued that reassessment proceedings have been commenced without any information and material being supplied to the petitioner. The record shows that notice, in the first instance, was issued to the petitioner under Section 148 of the Act on 07.04.2021. Since the new regime kicked in, a fresh notice under Section 148A(b) dated 27.05.2022 was issued to the petitioner.
The allegation against the petitioner is that it has received bogus entry from an entry provider i.e., one Mr Ramesh Kumar Bagri. It was evident that in the suspicious transaction referred to under the heading “information available and action initiated”, concerning Mr Bagri, there is no reference to the petitioner. Mr Abhishek Maratha, who appeared on behalf of the respondent/revenue, has placed before us the information received by the assessing officer and contended that there is a reference to an entity going by the name Tirupati Trading Corporation [which is also the name of the petitioner] and against the said entity it is shown that an amount equivalent to Rs.1,76,00,000/- has been credited. A certificate has been issued as per the request of the customer without any risk and responsibility of bank officials. CBI has stated that the amount of Rs.1,76,00,000/- was neither remitted nor credited from the accounts of the petitioner maintained with it.
It was found that the discrepancy could have been on account of a typographical error, at the moment. As there was no information or material available with the concerned authority to trigger proceedings under Section 148/148A(d) of the Act and court had granted four weeks to the respondent/revenue to file a counter-affidavit in the matter. The interim order passed on 16.12.2022 was made absolute during the pendency of the writ petition and the pending interlocutory application was disposed of. No counter-affidavit has been lodged with the Registry. However, Mr Abhishek Maratha, senior standing counsel, who appeared on behalf of the respondent/revenue, has placed before us a hard copy of the counter-affidavit that has been prepared for being lodged with the court.
The counter-affidavit reveals that, concededly, a mistake has been made in triggering reassessment proceedings against the petitioner. In view of the assertions made in the counter-affidavit, Mr Maratha, cannot but accept that reassessment against the petitioner cannot continue A division bench of Justice Rajiv Shakdher and Justice Girish Kathpalia set aside the impugned order passed under Section 148A(d) and consequential notice issued under Section 148 of the Income Tax Act, 1961.