Delhi HC quashes Income Tax Notice issued on Mistaken Belief that Entire Property is in Ownership of Alleged Tax Defaulter [Read Order]

The Delhi High Court quashed income tax notice issued on mistaken belief that entire property is in ownership of alleged tax defaulter.

The petitioners in the present matter are Mrs Mansi Garg and Others. By way of notice issued by respondent no. 2, Commissioner of Income Tax, addressed to one Romesh Sharma, the subject flat, owned solely by petitioners no. 3 and 4 was attached under mistaken belief that the entire property is owned by Romesh Sharma, an alleged tax defaulter. 

Consequent to the impugned notice, the respondent no. 3, Sub-Registrar sought a clarification from respondent no. 2 as to whether the petitioners’ request for registration of sale deed pertaining to the subject flat should be kept on hold, despite the fact that Romesh Sharma held interest only in the basement of the said property. 

On getting no response, the respondent no. 3 rejected the petitioners’ application for registration of sale deed by way of impugned rejection order. Petitioners specifically pleaded having never defaulted on their obligations to pay the income tax. Hence, the present writ petition.

A Division Bench of Justices Girish Kathpalia and Rajiv Shakdher observed that “The respondents opted not to resist this writ action. Learned counsel for respondents who appeared in the High Court submitted on the basis of instructions that in the subject property, it is only the basement which is owned by Romesh Sharma and that Romesh Sharma has no right, title or interest in rest of the floors of the said property. That being so, the impugned notice issued by respondent no. 2 cannot survive.”

The Bench further noted that so far as the rejection order, impugned in the present writ petition is concerned, the petitioners have to initiate fresh steps. For, the impugned rejection order issued by respondent no. 3 was not premised on the notice issued by respondent no. 2.

“In view of above discussion, the writ petition is disposed of, thereby quashing the impugned notice issued by respondent no. 2” the Bench concluded.

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