Dharmendra Kumar Singh v. UOI (Allahabad High Court)

Case snapshot

Sections / provisions: 148; 148A; natural justice; high pitched assessment; gross negligence

Questions before the Court / Tribunal

• Srhi Tarun Bajaj, Revenue Secretary to the Government of India, New Delhi dated 19.5.2022 had filed an Affidavit in Harish chandra bhati vs. PCIT if order passed is high-pitched, or there is non-application of mind or gross negligence action shall be taken against such officers. this order passed by AO is patently erroneous and grossly illegal, which also reflects abuse of power by the concerned officer. the action against concerned shall be taken in 4 weeks and intimation shall be sent to the taxpayer as well as the court.
• What factual, statutory and procedural conditions control the relief?
• How does the operative order apply to the parties and the challenged proceeding?

Material facts and procedural background

Petitioner :- Dharmendra Kumar Singh Respondent :- Union Of India And 2 Others Counsel for Petitioner :- Rahul Agarwal,Ashok Kumar Singh Counsel for Respondent :- A.S.G.I.,Gaurav Mahajan,Krishna Agarawal,N.C.Gupta

1. Heard Sri Rahul Agarwal, learned counsel for the petitioner and Sri Krishna Agarwal, learned counsel for the Income Tax Department.

“(a) Issue a writ, order or direction in the nature of Certiorari quashing the impugned order dated 31.03.2022 (Annexure-4 to the writ petition) passed by the assessing authority for the Assessment Year 2018-19 under Section 148A(d) against the petitioner as also the notice under Section 148 dated 31.03.2022 (Annexure 5 to the writ petition);”

“1. Heard Shri Rahul Agarwal, learned counsel for the petitioner, Shri N.C. Gupta, learned Central Government Standing Counsel for the respondent no. 1 and Shri Krishna Agarwal, learned counsel for the respondent nos. 2 and 3. 2. This writ petition has been filed praying for the following relief: "(a) Issue a writ, order or direction in the nature of Certiorari quashing the impugned order dated 31.3.2022 (Annexure-4 to the writ petition) passed by the assessing authority for the Assessment Year 2018-19 under Section 148A(d) against the petitioner as also the notice under Section 148 dated 31.03.2022 (Annexure 5 to the writ petition);" 3. The impugned notice dated 23.3.2022 under clause (b) of Section 148A of the Income Tax Act, 1961 (hereinafter referred to as the 'Act, 1961') for the assessment year 2018-19 was issued by the respondent no. 3 to the petitioner on the basis of information available i.e. 'purchase of immovable property more than 20,00,000/-' and accordingly required the petitioner to explain the nature and source of above transaction along with documentary evidences. The petitioner filed a reply dated 30.3.2022 explaining that immovable property in question is a…

information which suggests that income chargeable to tax has escaped assessment. Clause (d) of Section 148A of the Act provides that on the basis of material available on record including reply of the assessee, the Assessing Authority shall decide as to whether or not it is a fit case to issue a notice under section 148. 6. Thus, under Section 148A of the Act, 1961, enquiry is to be conducted by the Assessing Officer with respect to the information received by him, show cause notice is to be issued by him to the assessee on the basis of that information and the order under clause (d) is to be passed by him with reference to the information received. 7. Under the circumstances, we direct the respondent nos. 2 and 3 to file counter affidavit by means of their personal affidavits within three days, failing which, the respondent no. 3 shall remain personally present and shall show cause as to why exemplary cost be not imposed. 8. Put up as a fresh case before the appropriate Bench on 25.5.2022. 9. As an interim measure, it is provided that till the next date fixed, proceedings pursuant to the notice under section 148 dated 31.3.2022 for the assessment year 2018-19 shall remain stayed.”

Appellant / assessee submissions

1. Heard Sri Rahul Agarwal, learned counsel for the petitioner and Sri Krishna Agarwal, learned counsel for the Income Tax Department.

“1. Heard Shri Rahul Agarwal, learned counsel for the petitioner, Shri N.C. Gupta, learned Central Government Standing Counsel for the respondent no. 1 and Shri Krishna Agarwal, learned counsel for the respondent nos. 2 and 3. 2. This writ petition has been filed praying for the following relief: "(a) Issue a writ, order or direction in the nature of Certiorari quashing the impugned order dated 31.3.2022 (Annexure-4 to the writ petition) passed by the assessing authority for the Assessment Year 2018-19 under Section 148A(d) against the petitioner as also the notice under Section 148 dated 31.03.2022 (Annexure 5 to the writ petition);" 3. The impugned notice dated 23.3.2022 under clause (b) of Section 148A of the Income Tax Act, 1961 (hereinafter referred to as the 'Act, 1961') for the assessment year 2018-19 was issued by the respondent no. 3 to the petitioner on the basis of information available i.e. 'purchase of immovable property more than 20,00,000/-' and accordingly required the petitioner to explain the nature and source of above transaction along with documentary evidences. The petitioner filed a reply dated 30.3.2022 explaining that immovable property in question is a…

“10. It is further respectfully submitted that even though a large number of assessments were carried out efficiently and effectively, yet, recognising the difficulties faced by the tax payers, the Central Board of Direct Taxes issued instruction F. No. 225/101/2021/-ITA-II, dt. 25/04/22, for dealing with taxpayers grievances. The local committee ascertains whether the additions made in the assessment order is not backed by any sound reasons or logic, provisions of law have been grossly misinterpreted or obvious and well-established facts on record have been ignored outrightly. The said instruction also provides for initiation of suitable administrative action against the erring officer in case where assessments are found by the local committee to be high-pitched or where there is non-observance of principles of natural justice, non- application of mind or gross negligence of assessing officer/ Assessment Unit. Also, the findings of the local committee are considered for revisiting SOP/policy on faceless assessment and addressing systems related issues.”

Revenue / respondent submissions

9. The action taken by the respondent No.1 in terms of the above referred instructions of the respondent No.1 dated 23.04.2022 read with paragraph-10 of the affidavit referred in our order dated 19.05.2022 passed in Writ Tax No.465 of 2022 (Harish Chandra Bhati vs. Principal Commissioner Of Income Tax Noida And 2 Others) shall be communicated to the petitioner by the respondent No.1 within four weeks. A compliance report shall also be submitted by the respondent No.1 before this Court within six weeks which shall be placed before us on 12.07.2022 along with records of this writ petition.

Court / Tribunal analysis and reasoning

The reasoning is integrated into the packaged record. Read it with the facts, statutory text and operative directions; this editorial article does not invent missing reasons.

Operative decision and relief

8. Considering the facts and circumstances of the case and the statement made by the respondent No.2 in paragraph-7 of the personal affidavit, the impugned order dated 31.03.2022 under Section 148A(d) of the Income Tax Act, 1961 for the Assessment Year 2018-19 passed by the respondent No.3 and the impugned notice under Section 148 dated 31.03.2022, are hereby quashed. The writ petition is allowed.

Ratio and legal principle

• The packaged judgment addresses Srhi Tarun Bajaj, Revenue Secretary to the Government of India, New Delhi dated 19.5.2022 had filed an Affidavit in Harish chandra bhati vs. PCIT if order passed is high-pitched, or there is non-application of mind or gross negligence action shall be taken against such officers. this order passed by AO is patently erroneous and grossly illegal, which also reflects abuse of power by the concerned officer. the action against concerned shall be taken in 4 weeks and intimation shall be sent to the taxpayer as well as the court. The precise proposition must be read with the Court/Tribunal's reasoning and operative directions.
• Reliance depends on matching the statutory version, jurisdiction, procedural stage and material evidence recorded in the judgment.

Why this judgment matters

This decision is relevant to practitioners and affected parties dealing with srhi tarun bajaj, revenue secretary to the government of india, new delhi dated 19.5.2022 had filed an affidavit in harish chandra bhati vs. pcit if order passed is high-pitched, or there is non-application of mind or gross negligence action shall be taken against such officers. this order passed by ao is patently erroneous and grossly illegal, which also reflects abuse of power by the concerned officer. the action against concerned shall be taken in 4 weeks and intimation shall be sent to the taxpayer as well as the court. Its value lies in showing how the adjudicating forum connected the applicable rule to the proved facts and procedural posture.

Practitioner action points

• Match the statutory version, jurisdiction, procedural stage and decisive evidence before relying on the result.
• Verify current appellate, review and SLP history and any later amendment or controlling authority.
• Attach the complete judgment to the working paper or filing and cite the paragraph/page supporting the proposition.

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Section / provision impact

• 148 - apply the exact version considered in the judgment.
• 148A - apply the exact version considered in the judgment.
• natural justice - apply the exact version considered in the judgment.
• high pitched assessment - apply the exact version considered in the judgment.
• gross negligence - apply the exact version considered in the judgment.

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