The Delhi High Court (HC) directed to re-adjudicate the high pitched assessment by income tax department with unusual determination of rate of gross profit.
This writ petition is directed against the order passed by the Assessing Officer (AO) under Section 220(6) of the Income Tax Act, 1961, concerning Assessment Year (AY) 2020- 2021.
The impugned order was passed, based on applications filed by the petitioner, to stay the demand amounting to Rs.7,43,46,066/.The petitioner had asked for stay of demand, and waiver of 20% of the demand.
The assessing officer has scaled down the demand, via the impugned order which is a pending adjudication of the appeal preferred by the petitioner with the Commissioner of Income Tax (Appeals) (CIT) (A) to 20% of the aforementioned demand.
Against the demand amounting to Rs.7, 43, 46,066/-, the petitioner has been called upon to deposit, for the moment, Rs.1, 48, 69,213/-. This amount was required to be deposited by 15.01.2023.
The counsel for the petitioner informed that the petition filed by petitioner is pending adjudication before the Principal Commissioner of Income Tax (CIT) qua the impugned order.
The court observed that the record shows that the demand made against the petitioner emanates from the assessment order passed under Section 143(3) and read with Section 144B of the Income Tax Act 1961.A perusal of the said order would show, that the petitioner had pegged his taxable income at Rs.47,63,940/-.
The Assessing Officer (AO) has concluded that at least purchases worth Rs.55, 87, 13,094/- were made from bogus entities and no filers of income tax returns.
The assessing officer has disallowed bogus purchases, albeit to meet the ends of justice, amounting to Rs.6, 98, 39,136/- [being 12.5% of Rs 55, 87, 13,094/-.
The addition has been made, by taking recourse to Section 69C of the income Tax Act 1961, on the ground that the said purchases are unexplained.
It is in these circumstances, the assessed income has ballooned to Rs.7, 46, 03,080/- from the declared taxable income, amounting to Rs.47, 63,940/-.
The Coram comprising Justice Rajiv Shakdher Justice Tara Vitasta Ganju ordered the commissioner of income tax (CIT) to dispose of the application within two weeks of receipt of a copy of the judgment and if any, order passed adverse to the interests of the petitioner will not be given effect to for a further period of two weeks, to enable the petitioner to take recourse to an appropriate remedy. The writ petition is disposed of in the aforesaid terms.
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