Amarjot Kaur vs. Office Of The Income Tax Officer Ward 35(5), Delhi & Ors.

Facts

The petitioner, Amarjot Kaur, filed two writ petitions before the Delhi High Court. W.P.(C) 6077/2024 concerned reassessment proceedings for AY 2017-2018, initiated by a notice under Section 148A(b) of the Income Tax Act, 1961, dated February 28, 2024, followed by a notice under Section 148 dated March 14, 2024, and an order under Section 148A(d) dated March 14, 2024. The petitioner's primary contention was that the partnership firm, to which the PAN related, had been dissolved on March 31, 2004, and thus proceedings were sought against a non-existent entity. W.P.(C) 6079/2024 pertained to AY 2019-2020, involving similar notices and orders, with the petitioner claiming a belated receipt of the notice leading to a delayed response.

Held

The Court held that in W.P.(C) 6077/2024, the Assessing Officer (AO) had failed to accord due consideration to the petitioner's submission regarding the dissolution of the partnership firm. The AO's order under Section 148A(d) acknowledged the submission but did not adequately address it, particularly the claim of business continuation as a proprietor. Consequently, the Court found it appropriate to remit the matter back to the AO to commence proceedings afresh from the stage of Section 148A(b). The impugned order dated March 14, 2024, under Section 148A(d) and the consequential notice under Section 148 were set aside. For W.P.(C) 6079/2024, the Court noted that a final assessment order had been passed and the petitioner had efficacious statutory alternative remedies. The Court declined to delve into the disputed questions regarding the belated receipt of notice and delayed submission, as the petitioner could pursue available remedies. The ratio for W.P.(C) 6077/2024 is that failure to consider a material submission regarding the dissolution of a business entity can vitiate reassessment proceedings, necessitating a remand.

Key Issues

1. Whether the Assessing Officer (AO) failed to consider the petitioner's submission regarding the dissolution of the partnership firm in the reassessment proceedings for AY 2017-2018, thereby vitiating the order passed under Section 148A(d) of the Income Tax Act, 1961? Petitioner's argument: The petitioner argued that the partnership firm, S P Electronics & Battery Products, was dissolved on March 31, 2004, and she continued the business as a proprietor. The AO's order under Section 148A(d) failed to consider this crucial fact, despite it being brought to their attention. Revenue's argument: The judgment does not record specific arguments from the revenue regarding this issue, but the AO's order noted that the assessee had not submitted supporting documents like cash books and ledgers to establish that cash deposits were accounted for under her proprietorship PAN. 2. Whether the petitioner in W.P.(C) 6079/2024 has efficacious alternative remedies given that a final assessment order has been passed and the reply was submitted after the stipulated period for response under Section 148A(b)? Petitioner's argument: The petitioner contended that the notice was received belatedly, causing a delayed submission of the response. Revenue's argument: The judgment does not record specific arguments from the revenue on this point, but it notes that the reply was received after the period for submission had expired.