Sanket Vinayak Nagvekar v. ITO

Case snapshot

Sections / provisions: 144; 144C

Questions before the Court / Tribunal

• Draft assessment order for eligible non-resident; jurisdiction: The Bombay High Court quashed the reassessment/final assessment rather than remanding it. The taxpayer had been accepted as a non-resident and therefore was an eligible assessee for section 144C; no draft order was served. The Court also found section 144 inapplicable, the completing officer lacked the proper international-tax jurisdiction, and the addition was arbitrary on the record.

Material facts and background

Brief facts of the case, as pleaded in the Petition, are brought out

The Petitioner is an individual and a citizen of India.

According to the Petitioner, he has been residing and working in the United Arab Emirates for several years and claims the status of a non-resident under the Act for the Assessment Year 201819. b.

On 17th March 2022, Respondent No. 1 issued a Notice

under Section 148A(b) of the Act alleging that the Petitioner had purchased immovable property for Rs. 2,04,60,800/- during the year under consideration and had not filed any return of income. The Notice did not disclose the source of information, details of the property or the date of purchase, and continued to mention the Petitioner's old Virar address. Page 2 of 27 JULY 20, 2026 Mansi shelke

The said Notice was not replied to at that stage as the

Petitioner, being based in UAE, was not then fully conversant with Indian tax procedures and had no regular consultant. It is the Petitioner's case that only in January 2023 did he approach a Chartered

Appellant / assessee submissions

The Learned Counsel for the Petitioner raised four alternate

in the preceding year, which was also answered. Therefore, the Petitioner had not only repeatedly explained that the figure of Rs. 2,04,60,800/- was incorrect and arose due to quadruple reporting, but had also furnished complete details of source of the actual purchase consideration of Rs. 50,00,000/- through remittances from UAE into his NRE account in India. Despite this, the Assessing Officer arbitrarily stated that the Assessee had not furnished documentary evidence and had not filed bank statements of SBI and UBI, and further observed that since the matter was getting barred by limitation, he had no option but to complete the assessment on the basis of material available on record. According to the learned Counsel for the Petitioner, this is ex facie arbitrary and in gross violation of the principles of natural justice.

Revenue / respondent submissions

The judgment copy does not separately set out this component in a distinct section; refer to the full order and the reasoning section below.

Court / Tribunal analysis and reasoning

assessment. According to him, Section 144 can be invoked only if one of the jurisdictional conditions under Section 144(1) is fulfilled, namely, where no return is filed, or there is failure to comply with Notices under Section 142(1), or failure to comply with the Notice under Section 143(2). In the facts of the present case, the Petitioner had filed a Return Of Income on 12 th January 2023 in response to the Notice under Section 148, the same was acknowledged, and a Notice under Section 143(2) was thereafter issued on 10th February 2023. Except for the first Notice dated 14th October 2022, the Petitioner replied to all subsequent Notices under Section 142(1), and since the queries in the later Notice substantially repeated the queries raised earlier, complete replies were filed by the Petitioner. He submitted that in the impugned Order, the Assessing Officer incorrectly stated that the Assessee failed to furnish Return Of Income in response to the Notice and therefore best judgment assessment was invoked. This, according to him, is factually incorrect. In this regard, he relied upon the decision of this Court in Ashok Commercial

resident and had his address in Maharashtra. Despite this, the Notice under Section 148 was issued by an officer at Gurgaon and the impugned Order also came to be passed by the Income Tax Officer, Ward 4(1), Gurgaon. Without prejudice to the earlier contentions, once the Assessee was a non-resident, the matter ought to have been handled by the International Tax Circle. He pointed out that this position is in fact accepted by the Department itself in paragraph 18 of the Affidavit-In-Reply, where it is stated that if the Petitioner is a non-resident, then the Jurisdictional Assessing Officer would be the one dealing with International Taxation. Since, this was not done, he submitted that the impugned Order is without jurisdiction. Further, being a non-resident as recorded in the Assessment Order, the Petitioner is an ‘eligible assessee’ in terms of Section 144C (15)(b)(ii) of the Act and therefore, the Assessing Officer under sec 144C (1) was required to issue draft of the proposed Order of Assessment [draft Order]. In the present case, no draft Order was issued by the Assessing Officer before finalizing the assessment. d.

in the preceding year, which was also answered. Therefore, the Petitioner had not only repeatedly explained that the figure of Rs. 2,04,60,800/- was incorrect and arose due to quadruple reporting, but had also furnished complete details of source of the actual purchase consideration of Rs. 50,00,000/- through remittances from UAE into his NRE account in India. Despite this, the Assessing Officer arbitrarily stated that the Assessee had not furnished documentary evidence and had not filed bank statements of SBI and UBI, and further observed that since the matter was getting barred by limitation, he had no option but to complete the assessment on the basis of material available on record. According to the learned Counsel for the Petitioner, this is ex facie arbitrary and in gross violation of the principles of natural justice.

Respondents, relied upon the Affidavit-in-Reply filed by Mr. Ramrao Chhapparghare, Income Tax Officer, Ward 3(2), Kalyan, affirmed on 1 st April 2024. At the outset, he submitted that an alternate remedy by way of statutory appeal was available and ,therefore, the Writ Petition ought not to be entertained. Without prejudice to the aforesaid argument, in answer to the Page 12 of 27 JULY 20, 2026 Mansi shelke

Mr. Sharma relied on Ground 5-F of the Affidavit-in-Reply and submitted that, although no comments were offered as the assessment was completed by Respondent No. 1, the Assessment Order itself refers to Notices dated 5 th January 2023 and 12th January 2023 and, therefore, it cannot be said that Section 144 was wrongly invoked. c.

and, therefore, even if this Court were to accept the contentions of the Petitioner, the proper course would be to set aside the Order and remand the matter to the Assessing Officer.

Operative decision and relief

that the matter should now be remanded to the Assessing Officer. Having gone through the material placed before us, we are satisfied that this is not a fit case for remand. We are satisfied that the transaction was reported four Page 24 of 27 JULY 20, 2026 Mansi shelke

remedies, is not affected in a case where the authority against whom the Writ is filed has usurped its jurisdiction without any legal foundation. Not entertaining a Writ Petition where statutory remedies are available, is really one of self-restraint, and it can never be argued that the Writ Petition is not maintainable. We, therefore, do not find any merit in the first argument canvassed on behalf of the Revenue .... 12. As far as the request made for remanding the matter back to the Assessing Officer is concerned, we find that there is no conceivable ground that has been brought on record based on which the request for remand has been made by the learned Advocate appearing for the Revenue. It is not as if the Assessing Officer was unaware that no deduction has been claimed by the Petitioner. During the assessment proceedings, on more than half a dozen occasions, the Petitioner had highlighted this fact. Nevertheless, the Assessing Officer proceeded to make the aforesaid addition, and that too by relying upon the treatment given in the books of account of the Petitioner/Assessee. Therefore, the addition made was a conscious act of the Assessing Officer and cannot be regarded as...

30th March 2023 passed under Section 147, read with Section 144, of the Act, the consequential Notice of demand and the Show Cause Notice for levy of penalty of the same date are hereby quashed and set aside.

The Petition is disposed of in the above terms. There shall be no

Authorities and precedents appearing in the judgment

• Ltd. v. Assessment Unit & Ors
• Enterprises v. Assistant Commissioner of Income Taxation
• Barentz India (P.) Ltd. vs. Assessment Unit
• Hansgrohe India (P.) Ltd. vs. Assessment unit Income-tax Dept
• Court in Ashok Commercial Enterprises v. Assistant
• Court in case of Kedaara Captial Fund II LLP vs. Assessment Unit

This list is machine-assisted from the judgment text and is not a substitute for checking the full citation chain in the PDF.

Ratio and legal principle

The decision turns on Draft assessment order for eligible non-resident; jurisdiction. The operative result is classified as Quashed Or Set Aside. Read the rule only with the statutory version, factual findings and precedent chain recorded in the full judgment.

Why this judgment matters

The case is relevant to taxpayers, advisers and litigators dealing with Draft assessment order for eligible non-resident; jurisdiction. Its practical value lies in the interaction between the statutory text, the evidentiary record and the procedural route followed in this case.

Practitioner action points

• Use the judgment as a fact-specific precedent: match the statutory version, assessment period, procedural stage and evidentiary record before relying on the result.
• Check whether a later High Court/Supreme Court order has affirmed, reversed, distinguished or rendered the decision academic.
• For litigation, attach the full judgment/order to the working paper and cite the paragraph/page supporting the proposition rather than relying on a headnote alone.

Full judgment and source trail

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