A Division Bench of the Delhi High Court, ruled in favour of the Income Tax Department while deciding a writ petition by Jain Cooperative Bank Ltd. and held that, the court cannot strike down the reopening of the case in the facts of the case.
The petitioner-assessee filed a writ petition before the High Court of Delhi for quashing reassessment proceedings initiated by the Assessing Officer based on some suspicious transactions flagged by the Financial Intelligence Unit (FIU). The Assessee had deposited huge cash amounting to Rs.141.28 crores during the period from 01st April, 2016 to 31st December, 2016. From the Search Assessment order, it was unclear whether the transactions were verified by the Assessing Officer. Pursuant to the search, an order was passed for assessment without revealing any aspect of the cash deposits which were said to have been specifically examined by the Assessing Officer, according to the submissions of the counsel on behalf of the petitioner.
The petitioner also submitted that the Assessing Officer also failed to consider the reply filed in detail in response to the show cause notice filed by the assessee while issuing the said impugned order, thus violating the natural justice principle of audi alteram partem or hear the other side and that the said Notices are insufficient and amount to a mere ‘change of opinion’ on an aspect already known to the respondents.
The court examined the question as to whether the principle of natural justice has been violated in the case and answered that it cannot be in strict compliance with the principles of natural justice all the time and that they vary in applicability from case to case. In the matter of allegations regarding the deposits in the demonetization period, a prima facie escapement of income was made out from the facts and the proceedings of reassessment have already started with the issue of notice under Section 148 of the Income Tax Act, 1961. The Assessing Officer was directed to decide the matter on its own merits without any influence by the present order. Concluding that it was not upto the court to decide on whether the notice issued under Section 148 of the Income Tax Act was to be quashed along with the proceedings of reassessment, as a result of which the Bench comprising of Justice Manmohan and Justice Manmeet Pritam Singh Arora dismissed the writ petition by the assessee.
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