Reopening of Assessment for Cash Deposits – SLP Dismissed as the assessee intends to go back to the High Court to point out a factual error in the High Court’s judgment.
Summary in Key Points:
- Issue: Whether a Special Leave Petition (SLP) challenging the High Court’s order upholding the reopening of an assessment should be dismissed when the assessee intends to go back to the High Court to point out a factual error in the High Court’s judgment.
- Facts: The assessee received a reopening notice under Section 148A(b) regarding cash deposits in their bank account. The High Court upheld the reopening notice, stating that the assessee’s response did not provide crucial information about the cash deposits. However, the assessee claimed that the High Court’s observation was factually incorrect.
- Decision: The Supreme Court dismissed the SLP as not pressed, allowing the assessee to withdraw the petition and approach the High Court to rectify the factual error.
Decision:
The Supreme Court dismissed the SLP filed by the assessee against the High Court’s order. The court’s decision was based on the following:
- Factual Error: The assessee claimed that the High Court’s observation in its judgment was factually incorrect.
- Withdrawal of SLP: The assessee sought permission to withdraw the SLP to approach the High Court and rectify the factual error.
- Dismissal as Not Pressed: The Supreme Court dismissed the SLP as not pressed, allowing the assessee to pursue their remedy in the High Court.
Important Note: This case highlights the importance of factual accuracy in judicial proceedings. The Supreme Court’s decision to dismiss the SLP as not pressed allows the assessee to approach the High Court and seek rectification of the factual error in the High Court’s judgment. This ensures that the reassessment proceedings are based on accurate facts and that the assessee’s rights are protected.
SUPREME COURT OF INDIA
Dhan Prakash Gupta
v.
Income-tax Department
J.B. PARDIWALA and R. Mahadevan, JJ.
SLP Appeal (C) No. 31018 of 2024
JANUARY 3, 2025
Amar Gupta and Chanderkant Tyagi, Advs. and Ashutosh Thakur, AOR for the Petitioner.
ORDER
1. According to the learned counsel appearing for the petitioner what has been observed by the High Court in Para 10 of the impugned judgment is factually incorrect.
2. If that be so, it was expected of the petitioner to go back to the High Court pointing out that there is an error.
3. At this stage, the learned counsel sought permission to withdraw this petition as he intends to go back to the High Court.
4. The Special Leave Petition is dismissed as not pressed.
___________________________________________
HIGH COURT OF DELHI
Dhan Prakash Gupta
v.
Income-tax Department
Vibhu Bakhru and MS. SWARANA KANTA SHARMA, JJ.
W.P.(C) No. 9184 of 2024
NOVEMBER 20, 2024
Chander Kant Tyagi and Amar Gupta, Advs. for the Petitioner. Sanjay Kumar, Adv. for the Respondent.
ORDER
Vibhu Bakhru, J. – CM APPL. 67582/2024 (for early hearing)
1. This is an application seeking an early hearing of the above captioned petition which is now listed on 09.04.2025.
2. The application is allowed, and with the consent of the learned counsel for the parties, the above captioned petition is taken on Board.
3. The hearing scheduled on 09.04.2025, is cancelled.
W.P.(C) 9184/2024
4. The petitioner has filed the present petition impugning a notice dated 01.03.2024 (hereafter the impugned notice) issued under Section 148A(b) of the Income Tax Act, 1961 (hereafter the Act). The petitioner also impugns a consequent order dated 30.03.2024 (hereafter the impugned order) issued under Section 148A(d) of the Act seeking reopening of the petitioner’s assessment for the assessment year (AY) 2017-18.
5. Apart from assailing the impugned notice and the impugned order on merits, the petitioner also challenges the initiation of the said proceedings on the ground of jurisdiction of the Jurisdictional Assessing Officer (hereafter the JAO). The petitioner claims that JAO does not have the jurisdiction to initiate the said proceedings after the issuance of CBDT Notification dated 29.03.2022.
6. Insofar as the petitioner’s challenge to the jurisdiction of the JAO to issue the impugned notice is concerned, the said issue stands settled in favour of the Revenue by the decision of this court in T.K.S. Builders Pvt. Ltd. v. Income Tax Officer Ward 25 (3) New Delhi, 2024:DHC:8330-DB. Accordingly, the petitioner’s contention that the impugned notice and the impugned order are liable to be set aside as the same have been issued without jurisdiction, is rejected.
7. Insofar as the issue on merits is concerned, it is the petitioner’s case that his response to the impugned notice was not considered.
8. The learned counsel for the petitioner submits that the petitioner had asked for further information regarding the entries as set out in the impugned notice, which were suggestive of the petitioner’s income escaping assessment. However, the petitioner had not received any response from the JAO. It is also stated that the petitioner had sought an oral hearing, which was also not afforded to the petitioner.
9. A plain reading of the impugned notice indicates that the JAO had information that large cash deposits were made in the petitioner’s bank accounts. A tabular statement relating to the information regarding the cash deposits as set out in the impugned notice, is reproduced below:
| Information Code | Information Description | Source | Amount Description | Amount (Rs.) |
| SFT-003 | Cash withdrawals (including through bearer’s cheque) in current account | STATE BANK OF INDIA | Aggregate gross amount received from person in cash | 8965000 |
| SFT-003 (D) | Cash deposits (including through bearer’s cheque) in current account | VIJAYA BANK | Aggregate gross amount received from person in cash | 10318062 |
| SFT-006 | Payments made by any person in respect of one or more credit cards issued to that person, in a financial year | SBI CARDS AND PAYMENT SERVICES PRIVATE LIMITED | Aggregate gross amount received from person in cash | 5241312 |
| SFT-006 | Payments made by any person in respect of one or more credit cards issued to that person, in a financial year | KOTAK MAHINDRA BANK LIMITED | Aggregate gross amount received from person in cash | 5921118 |
| SFT-006 | Payments made by any person in respect of one or more credit cards issued to that person, in a financial year | THE HONGKONG & SHANGHAI BANKING CORPORATION LTD | Aggregate gross amount received from person in cash | 1132729 |
| SFT-005 | Payments made by any person in respect of one or more credit cards issued to that person, in a financial year | INDUSIND BANK LIMITED | Aggregate gross amount received from person_ Aggregate gross amount paid to the person | 2500000 |
| SFT-003 (W) | Cash deposits (including through bearer’s cheque) in current account | ICICI BANK LIMITED | Aggregate gross amount received from person in cash | 240000 |
| SFT-003 (D) | Cash deposits (including through bearer’s cheque) in current account | ICICI BANK LIMITED | Aggregate gross amount received from person in cash | 11730305 |
| SFT-006 | Payments made by any person in respect of one or more credit cards issued to that person, in a financial year | INDUSIND BANK LIMITED | Aggregate gross amount received from person in cash | 12524385 |
| FRM-15CB (P) | Certificate of accountant on foreign remittance (Form 15CB) | DHAN PRAKASH GUPTA | Amount payable (INR) | 1037683 |
| SFT-006 | Payments made by any person in respect of one or more credit cards issued to that person, in a financial year | ICICI BANK LIMITED | Aggregate gross amount received from person in cash | 6784989 |
| EXC-002 | Turnover from Services reported in service tax return | CBIC | Gross taxable amount | 21242048 |
| SFT-003 (D) | Cash deposits (including through bearer’s cheque) in current account | STATE BANK OF INDIA | Aggregate gross amount received from person in cash | 304600 |
| TOTAL | 8,79,42,231 | |||
10. In addition to the cash deposits aggregating Rs. 8,79,42,231/-, the JAO had also alleged that there was unexplained cash in the account (Axis Bank) amounting to Rs. 63,94,000/-. Thus, the total value of the transactions, which were suggestive of petitioner’s income escaping assessment was quantified at Rs. 9,43,36,231/-. The petitioner had responded to the impugned notice raising several issues. However, we do not find that the said response contains any information either as to the quantum of cash deposited during the previous year relevant to the AY 2017-18. There was also no explanation as to why large amounts were received in cash.
11. In view of the above, the AO had passed the impugned order holding that the petitioner’s response was found to be unsatisfactory.
12. The entire purpose of issuing a notice under Section 148A(b) of the Act is to enable the Assessee to respond to the information available with the AO, which may be suggestive of the Assessee’s income escaping assessment. In the instant case, where the allegation is that a large cash deposits were made in the bank account of the petitioner, the least that was required for the petitioner was to inform the AO as to the correct quantum of the cash deposits in his bank account and his explanation for the same. This crucial information is not available in the petitioner’s response to the impugned notice.
13. It is relevant to note that at the threshold stage of issuing a notice under Section 148 of the Act, the AO is not required to finally conclude whether any income has escaped assessment. The notice merely initiates the reassessment proceedings. Thus, all rights and contentions of the petitioner to contest the quantum as well as the taxability of the amounts as reflected in the impugned notice and the impugned order are reserved. However, at this stage, we are unable to accept that any interference by this court is warranted in proceedings under Article 226 of the Constitution of India.
14. The petition is, accordingly, dismissed.