+ W.p.(C) 3968/2024 &Cm Appl v. Assisstant Commissioner Of Income Tax Cental Circle-28 Delhi & Anr

$~34 IN THE HIGH COURT OF DELHI AT NEW DELHI+ W.P.(C) 3968/2024 &CM APPL. 16265/2024 (Stay) VIKAS ECOTECH LIMITED .....Petitioner VIKAS ECOTECH LIMITED .....Petitioner .....Petitioner Through: Mr. Ruchesh Sinha, Mr. Pankaj Aggarwal & Ms. Monalisa Maity, Advocates.Aggarwal & Ms. Monalisa Maity, Advocates. versus ASSISSTANT COMMISSIONER OF INCOME TAX CENTAL CIRCLE-28 DELHI & ANR. .....Respondents CENTAL CIRCLE-28 DELHI & ANR. .....Respondents .....Respondents Through: Mr. Abhishek Maratha, SSC with Mr. Parth Semiwal& Mr. Apoorv Agarwal, JSCs, Mr. Nupur Sharma, Mr. Manav with Mr. Parth Semiwal& Mr. Apoorv Agarwal, JSCs, Mr. Nupur Sharma, Mr. Manav Goyal, Mr. Gaurav Singh, Ms. Divya Verma & Mr. Divya Verma & Mr. Bhanukaran Singh Jodha, Advocates. Advocates. CORAM:HON'BLE MR. JUSTICE YASHWANT VARMAHON'BLE MR. JUSTICE RAVINDER DUDEJA O R D E R05.07.2024 % 1. The instant writ petition has been preferred against the impugned notices dated 20 February 2024 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 notice under Section 153C is dated 20 February 2024, it is ex facie evident that the aforenoted AY would fall beyond the window of six preceding AYs’ as provided under Section 153C. it is manifest from an ex facie perusal of the Satisfaction Note recorded by the jurisdictional Assessing Officer [“AO”] dated 19 February 2024 that the income which is alleged to have escaped assessment for the “relevant assessment year” does not exceed INR 50 lakhs. The jurisdictional AO has also failed to record its satisfaction that the escaped incomefor the “relevant assessment year”, and which would necessarily stretch to the block of 10 AYs’, is likely to exceed INR 50 lakhs and thereby fulfilling the threshold requirement as prescribed by the Fourth Proviso to Section 153A. 3. We find that the aforesaid aspects were duly considered by us while rendering judgment in Principal Commissioner of Income Tax Central – 1 vs. Ojjus Medicare Pvt. Ltd [2024 SCC Online Del 2439]. We deem it apposite to extract the following paragraphs of the aforesaid decision hereinbelow:- “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 a definitive 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 the phrase “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 being indicative 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. 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 being indicative 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 Ojjus Medicare Private Limited, while we allow the instant writ petition and quash the impugned notice issued under Section 153C of the Act dated 20 February 2024 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 4 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. RAVINDER DUDEJA, J. JULY 5, 2024/sk