Vijay Kumar v. Assistant Commissioner Of Income Tax, Central Circle 28, Delhi & Ors

$~44 * IN THE HIGH COURT OF DELHI AT NEW DELHI+ W.P.(C) 10664/2023 & CM APPL. 41349/2023 (Stay) VIJAY KUMAR ..... Petitioner Through: Ms. Ragini Handa, Mr. Ajay Wadhwa & Mr. Ujjwal Jain, Advs. versus ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 28, DELHI & ORS. ..... Respondents Through: Mr. Gaurav Gupta, SSC with Mr. Shivendra Singh & Mr. Yojik Pareek, JSCs. CORAM:HON'BLE MR. JUSTICE YASHWANT VARMAHON'BLE MR. JUSTICE AMIT BANSALO R D E R 24.05.2024 % 1.This writ petition has been preferred against the impugned notice dated 22 August 2022 issued under Section 153C of the Income Tax Act, 1961 [“Act”] for Assessment Year [“AY”] 2015-16 and all consequential proceedings. 2.Bearing in mind the undisputed fact that the Satisfaction Note recorded by the jurisdictional Assessing Officer [“AO”] of the petitioner was dated 16 August 2022, it is ex facie evident that the income which is alleged to have escaped assessment for the “relevant assessment year” does not exceed INR 50 lakhs, thereby not fulfilling the threshold requirement as prescribed by the Fourth Proviso to Section 153A. 3.The issue in any case stands answered and covered in favour of the writ petitioner in light of the judgment rendered in Principal Commissioner of Income Tax Central – 1 vs. Ojjus Medicare Pvt. Ltd [2024 SCC Online Del 2439]. The relevant paragraphs of the aforesaid decision read as under:- ““G. Insofar as the thresholds put in place by virtue of the Fourth Proviso to Section 153A are concerned and the argument of the writ petitioners of the condition of INR 50 lakhs being an unwavering precondition, we find ourselves unable to sustain that submissionbearing in mind the indubitable fact that proceedings for searchassessment commence upon the issuance of a notice and the AO atthat stage having really not had the occasion to undertake a detailedor in depth examination of the evidence collected or come to adefinitive opinion with respect to the total income which may haveescaped assessment.Since the computation and assessment ofincome that is likely to have escaped assessment would at this stagebe provisional, it would be incorrect to strike down initiation ofaction on a mere ex facie examination of the Satisfaction Note. Wealso in this regard bear in mind the Fourth Proviso using theexpression “amounts to or is likely to amount”. The usage of thephrase “likely to” is indicative of the Legislature being conscious ofthe provisional character of the opinion that the AO may haveformed at that stage. H.However, and at the same time, even if the identified asset at thatstage be quantified as less than INR 50 lakhs, the AO must forreasons to be duly recorded, be of the opinion that the ultimatecomputation of escaped income is likely to exceed INR 50 lakhs.The aforesaid satisfaction would have to be based on an assessmentof the material gathered and the potentiality of the same beingindicative of the escaped assessment exceeding INR 50 lakhs. Theformation of opinion in this respect would have to be based not onmere ipse dixit but reflective of a fair assessment of the quantum ofincome likely to have escaped assessment as distinct from merespeculation and conjecture. I.We further hold that since the precondition of INR 50 lakhs ormore constitutes a sine qua non for initiating action for the extendedten year block, the aforesaid satisfaction and the reasons in supportthereof would have to borne out from the Satisfaction Note itself. We are also of the opinion that the precondition of INR 50 lakhs is not liable to be viewed as being the qualifying criteria for each “relevant assessment year” that may be thrown open and that the said condition would stand satisfied if the escaped income cumulatively or in the aggregate meets the minimum benchmark of INR 50 lakhs.” 4. Accordingly, and for reasons assigned in our decision in I.We further hold that since the precondition of INR 50 lakhs ormore constitutes a sine qua non for initiating action for the extendedten year block, the aforesaid satisfaction and the reasons in supportthereof would have to borne out from the Satisfaction Note itself. We are also of the opinion that the precondition of INR 50 lakhs is not liable to be viewed as being the qualifying criteria for each “relevant assessment year” that may be thrown open and that the said condition would stand satisfied if the escaped income cumulatively or in the aggregate meets the minimum benchmark of INR 50 lakhs.” 4. Accordingly, and for reasons assigned in our decision in Ojjus Medicare Private Limited, while we allow the instant writ petition and quash the impugned notice issued under Section 153C of the Act dated 22 August 2022 insofar as it relates to AY 2015-16, we leave it open to the jurisdictional AO to examine the issue afresh bearing in mind the observations appearing in para 3 above. 5.In case the jurisdictional AO be of the opinion that the income alleged to have escaped assessment is likely to exceed INR 50 lakhs in the “relevant assessment year”, it would be open to it to draw proceedings afresh, if otherwise permissible in law. YASHWANT VARMA, J MAY 24, 2024/kk AMIT BANSAL, J