Delhi High Court Quashes Income Tax Penalty Notice Issued On The Strength Of A Non-Existent Assessment Order

The Delhi High Court has quashed the penalty notice issued on the strength of a non-existent assessment order.

The bench of Justice Rajiv Shakdher and Justice Girish Kathpalia has observed that the department had issued a show cause notice for penalty under Section 271 F on the strength of an assessment order dated May 9, 2023, which was already set aside by the Division Bench of the Delhi High Court vide judgement dated May 31, 2023.

The petitioners are the legal heirs of the deceased assessee, Kuldip Kohli. The petitioner received an aggrieved reassessment notice after the date of his death in the name of a deceased person or deceased assessee. The respondent passed the assessment order against the deceased assessee on his PAN without bringing on record all his legal heirs and/or transferring the proceedings to their PAN.

The division bench of the Delhi High Court set aside an assessment order of Rs. 10 crore passed by the Income Tax Department, solely on the ground that it was passed against only one of the legal heirs of the deceased assessee and not against all legal heirs.

M. Sufian Siddiqui, who appears on behalf of the petitioner, contended that what has been lost sight of is that the assessment order on the back of which the penalty notice has been issued was set aside by a coordinate bench of the court via order dated May 31, 2023, passed in W.P. (C) no. 7904/2023.

The court set aside the show-cause notice dated July 11, 2023. The Assessing Officer (AO) was directed to take the next steps in accordance with the law.

Case Title: Darpan Kohli Versus Assistant Commissioner Of Income Tax

Citation: 2023 LiveLaw (Del) 710

Date: 09.08.2023

Counsel For Appellant: M Sufian Siddiqui

Counsel For Respondent: Sunil Agarwal

Click Here To Read The Order