On June 6, a division bench of Justice J P Devadhar and Justice R P Sondurbaldota ruled against the I-T department, which had challenged an order passed in favour of the actor by the Income Tax Appellate Tribunal (ITAT) in June 2009.
The department had disputed Khan’s assessment of income for the period 2000-01.
While the actor had declared his income as Rs 9.32 crore, a re-assessment by the I-T department put it at Rs 13.61 crore. The I-T department’s case was that details of Khan’s income were revealed in post-assessment searches conducted by it on the premises of the actor’s then secretary, Sudhir Wahi , on November 23, 2000.
The actor moved the Commissioner of I-T (CIT appeals) against the order of the Assessing officer (AO).
Khan argued that no notice, which is mandatory under Section 143 (2) of the Income Tax Act, was issued to him before the start of the assessment proceedings.
The CIT ruled against Khan, but granted him relief. The department then filed an appeal in the ITAT, which ruled in the actor’s favour. The ITAT observed that the assessment framed by the commissioner was “bad in law” . The HC, while dismissing the department’s appeal, noted that in an earlier case of tax evasion against Khan, the court had considered a similar question and held that in the absence of the mandatory notice, the re-assessment order cannot be sustained. Source
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