Fortune Land And Housing Pvt Ltd v. Principal Commissioner Ofincome Tax 1 & Ors

$~239 *IN THE HIGH COURT OF DELHI AT NEW DELHI +W.P.(C) 11873/2022 & CM APPL. 35474/2022 FORTUNE LAND AND HOUSING PVT LTD ..... Petitioner Through:Mr. Anand Chaudhuri, Advocate. Versus PRINCIPAL COMMISSIONER OFINCOME TAX 1 & ORS. ..... Respondents Through: Mr.KunalSharma,Sr.StandingCounsel for Revenue with Ms.ZehraKhan,Jr.StandingCounselandMr.ShubhenduBhattacharya,Advocate. Mr.L.R.Goyal, Advocate for R-3. % Date of Decision: 17[th]August, 2022 CORAM: HON'BLE MR. JUSTICE MANMOHANHON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA J U D G M E N T MANMOHAN, J (Oral): 1.Present writ petition has been filed challenging the notice dated -05[th]March, 2019 issued under Section 226(3) of the Income Tax Act, 1961[‘the Act’] for the Assessment Years [‘AYs’] 2011-12 and 2013-14, whichhas not been supplied to the Petitioner. Petitioner seeks a direction to the W.P.(C) 11873/2022 Respondents to release the bank account of the Petitioner held with the AxisBank from attachment and allow the Petitioner to operate the same and togrant a stay on the demands raised as a consequence of the reassessmentorders passed for AYs 2011-12 and 2013-14. 2.LearnedcounselforthePetitionerstates thatduring regularassessment for the AY 2015-16, an addition of Rs.8,91,62,716/- was madeagainst the Petitioner on account of enhanced compensation sum (includinginterest) received from HUDA vide assessment order dated 20[th]November,2017 passed under Section 143(3) of the Act. He states that the addition waslater deleted by the CIT(A) vide order dated 08[th]March, 2018 passed underSection 250(6) of the Act. He further states that an appeal filed by therevenue against the said order is currently pending before the ITAT. Hestates that the enhanced compensation received by the Petitioner fromHUDA was duly transferred to Orris in accordance with the agreementbetween the Petitioner and Orris and the same was offered to tax by Orris asits business income which has been accepted by the authorities videassessment order passed in the case of Orris for the AY 2015-16. 3.LearnedcounselforthePetitionerstatesthatreassessmentproceedings were initiated against the Petitioner for the AYs 2011-12 and2013-14 solely based on the facts observed during assessment proceedingsfor AY 2015-16. He states that reassessment orders dated 14[th]December,2018 under Section 143(3) read with Section 147 of the Act were passedmaking additions of Rs.4,22,86,632/- and Rs.61,32,505/- for AYs 2011-12and 2013-14 respectively on account of enhanced compensation receivedfrom HUDA. He further states that the reassessment orders have beenchallenged by the Petitioner before the appellate authorities and are W.P.(C) 11873/2022 Page 2 of 4 currently pending adjudication. 4.Learned counsel for the Petitioner states that during the pendency ofthe appellate proceedings, the impugned notice dated 05[th]March, 2019 wasissued attaching the Petitioner’s bank account held with the Axis Bank. Hestates that contrary to the mandatory statutory procedure prescribed underSection 226(3)(iii) of the Act and principles of natural justice, the impugnednotice has not been served or provided to the Petitioner by Respondent No.2or the Income Tax Department till date. He further states that the Petitioneraddressed representations to the authorities seeking a stay on the recovery ofthetotaldemandraisedagainstthePetitioneraggregatingtoRs.3,14,43,360/- for AYs 2011-12 and 2013-14 and for release of attachedbank account of the Petitioner, however the same have not been decided tilldate.5.A perusal of the paper book reveals that the Respondents have alsonot decided the stay application dated 07[th]October, 2020 filed by thePetitioner till date. 6.Keeping in view the long passage of time, the present writ petition isdisposed of with a direction to the Respondent No.2 to decide thePetitioner’s stay application dated 7[th]October, 2020 within two weeks inaccordance with law. While deciding the stay application, the RespondentNo.2 shall keep in mind the order passed by the CIT(A) dated 08[th]March,2018, CBDT Circular/Office Memorandum dated 29[th]February, 2016 and31[st]July, 2017 as well as the CBDT Circular dated 06[th]March, 1989. TheRespondent is also directed to furnish the notice dated 05[th]March, 2019 tothe Petitioner within a week. W.P.(C) 11873/2022 7.With the aforesaid directions, the present writ petition along with thepending application stands disposed of. MANMOHAN, J AUGUST 17, 2022/msh MANMEET PRITAM SINGH ARORA, J W.P.(C) 11873/2022 Page 4 of 4