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Shantijanak Estates Private Limited vs. The Assistant Commissioner of Income Tax, Circle 22(2), Delhi & Anr.

Writ Petition (Civil) · 2026:DHC:8135-DBDecided 17 Sept 2026New Delhi Bench
W.P.(C) 12741/2026CNR: DLHC010412662026
Justice Dinesh Mehta · Justice Rajneesh Kumar Gupta

Background

After its income was reassessed upward and a penalty proceeding for under-reporting was initiated, the petitioner company paid the entire additional tax demand on time and applied for immunity from the penalty under Section 270AA of the Income Tax Act. The Assessing Officer rejected the immunity application, wrongly recording that the company had never filed a reply to the show-cause notice, even though the company had filed a reply the day before, with a proper acknowledgment reference number.

Decision Breakdown

The Court found it undisputed that the company had in fact filed its reply before the impugned order was passed, yet the order falsely stated no reply existed. Separately, the Court criticized the Assessing Officer for requiring the company to prove the "negative" fact that it had not filed any appeal, impossible to establish through positive evidence, and directed that a mere declaration to that effect (plus an undertaking to withdraw any appeal if one existed) should suffice. The Court set aside the rejection order and directed the Assessing Officer to decide the immunity application afresh, objectively and in accordance with law, by mid-October 2026, and to hold off on penalty proceedings until then.

Lesson Learnt

A tax authority cannot reject a taxpayer's application by falsely claiming a reply was never filed, nor can it demand proof of a negative fact (like "I never appealed"): taxpayers facing such demands can insist the authority accept a simple declaration instead.

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