Harish Chandra Bhati v. PCIT (Allahabad High Court)

Case snapshot

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

Questions before the Court / Tribunal

• A personal affidavit of Shri Tarun Bajaj, Revenue Secretary to the Government of India, has taken on record. The Government shall take all actions against the erring officers where it is established that assessment framed is High-pitched Assessment, there is non-observance of principles of natural justice, non-application of mind or gross negligence of Assessing Officer/Assessment Unit
• 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 :- Harish Chandra Bhati Respondent :- Principal Commissioner Of Income Tax Noida And 2 Others Counsel for Petitioner :- Ashish Bansal Counsel for Respondent :- Gaurav Mahajan,Arvind Kumar Goswami

1. Heard Sri Ashish Bansal, learned counsel for the petitioner, Sri S.P. Singh, learned Additional Solicitor General of India assisted by Sri Arvind Kumar Goswami, learned Central Government Standing Counsel and Sri Ashish Agarwal, learned Standing Counsel for the respondent-Income Tax Department.

4. In the order dated 30.03.2022 passed by this court, submissions of the learned counsel for the petitioner have been noted as under:-

“Learned counsel for the petitioner submits that the two land in question were jointly owned by seven persons. The petitioner herein and the aforesaid Dushyant Bhati both were also co-owners of the aforesaid agricultural land which was sold by two separate registered sale deeds. For the same set of reasons proceedings under Section 148 of the Act, 1961, were initiated against the petitioner and the aforesaid Dushyant Bhati who is the son of the petitioner. The Assessment Order dated 23.03.2022 under Section 147 read with Section 144 B of the Act, 1961, in respect of Dushyant Bhati has been passed by the National Faceless Assessment Centre, Delhi, accepting his claim that the land in question was accepted to be an agricultural land situate beyond 8 km. of municipal

limits. Thus the disclosed income in the returns for the Assessment Year 2013-14 has been accepted and no tax has been imposed in respect of the sale of the land in question. On the other hand totally contrary view has been taken in the matter of the petitioner vide reassessment order dated 28.03.2022, under Section 147 read with Section 144 B of the Act, 1961, passed by the National Faceless Assessment Centre, Delhi, whereby 1/7th of the consideration in respect of the land in question, belonging to the petitioner, has been assessed as a long term capital gain on the finding that the land in question is not an agricultural land. Thus, on the same set of facts while the respondents have accepted the claim of petitioner's son in respect of the same land and on the other hand in respect of the same land the stand taken by the petitioner has been rejected and the sale proceeds of the agricultural land has been assessed as a long term capital gain.”

Appellant / assessee submissions

1. Heard Sri Ashish Bansal, learned counsel for the petitioner, Sri S.P. Singh, learned Additional Solicitor General of India assisted by Sri Arvind Kumar Goswami, learned Central Government Standing Counsel and Sri Ashish Agarwal, learned Standing Counsel for the respondent-Income Tax Department.

4. In the order dated 30.03.2022 passed by this court, submissions of the learned counsel for the petitioner have been noted as under:-

“Learned counsel for the petitioner submits that the two land in question were jointly owned by seven persons. The petitioner herein and the aforesaid Dushyant Bhati both were also co-owners of the aforesaid agricultural land which was sold by two separate registered sale deeds. For the same set of reasons proceedings under Section 148 of the Act, 1961, were initiated against the petitioner and the aforesaid Dushyant Bhati who is the son of the petitioner. The Assessment Order dated 23.03.2022 under Section 147 read with Section 144 B of the Act, 1961, in respect of Dushyant Bhati has been passed by the National Faceless Assessment Centre, Delhi, accepting his claim that the land in question was accepted to be an agricultural land situate beyond 8 km. of municipal

5. In the order dated 18.04.2022, submission of learned counsel for the respondent Nos.1, 2 and 3 has been noted, as under:

Revenue / respondent submissions

The packaged judgment does not separately label the respondent's submissions in an independently extractable passage. No contention is inferred; read the full order.

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

Annexure: Quarterly Report on functioning of Local Committees to deal with taxpayers’ grievances from High-Pitched Scrutiny Assessments Date: Quarter 1/2/3/4, Year____ Number of Number of Number of Number of Number of Synopsis of grievances grievances grievances grievances grievances administrative brought received by disposed of by pending with where actions taken forward by the the Local the Local the Local assessment in respect of Local Committee Committee Committee at was found to cases found Committees during the during the the end of the be high- high-pitched from the last quarter quarter quarter pitched (Name, PAN quarter and Asst. Year Wise description has to be given.)

“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. 12. The Petitioner has statutory remedy under the Income Tax Act, 1961 which he may avail by filing revision petition before the…

13. In view of the aforesaid, the writ petition is disposed off giving liberty to the petitioner to avail statutory remedy of appeal or revision under the Act, 1961 as he may be advised. All pending applications are disposed off.

Ratio and legal principle

• The packaged judgment addresses A personal affidavit of Shri Tarun Bajaj, Revenue Secretary to the Government of India, has taken on record. The Government shall take all actions against the erring officers where it is established that assessment framed is High-pitched Assessment, there is non-observance of principles of natural justice, non-application of mind or gross negligence of Assessing Officer/Assessment Unit. 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 a personal affidavit of shri tarun bajaj, revenue secretary to the government of india, has taken on record. the government shall take all actions against the erring officers where it is established that assessment framed is high-pitched assessment, there is non-observance of principles of natural justice, non-application of mind or gross negligence of assessing officer/assessment unit 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.

Case network

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Different outcome / possible distinction

• PCIT v. Khyati Realtors Private Limited - Quashed / set aside
• PCIT Chandigarh v. ABC Papers Limited - Dismissed

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