AO cannot reject rectification applications under Section 154 solely because no appeal filed against original assessment

Delhi HC quashed rectification orders rejecting taxpayer's applications solely on grounds that no appeal was filed against original assessment orders. Court found jurisdictional AO improperly disposed of rectification applications pending since 2021 without proper consideration under Section 154. Matter remitted to AO for fresh consideration of rectification applications. Court declined to lift garnishee notices for INR 17,16,85,384 tax demand but permitted taxpayer to approach AO for modification with 20% security proposal. AO directed to dispose of rectification applications and garnishee notice modification requests within one week.

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Issues:
The judgment primarily deals with the challenge to Garnishee Notices and the disposal of pending rectification applications by the jurisdictional Assessing Officer.

Challenge to Garnishee Notices:
The writ petitions contested Garnishee Notices dated 31 January 2024, leading to restraints on specific bank accounts. The petitions related to Assessment Years 2016-17, 2018-19, 2020-21, and 2022-23. Additionally, two petitions sought to quash orders dated 10 February 2024 and 12 February 2024 concerning rectification applications.

Disposal of Rectification Applications:
The court noted the rejection of rectification applications for AY 2022-23 and 2016-17. The jurisdictional Assessing Officer (AO) refused rectification citing lack of conferred powers and non-filing of appeals. The court criticized the rejection based on appeal status and lack of clarity on rectification powers.

Court's Observations and Decision:
The court found fault with the rejection of rectification applications solely based on appeal status and lack of clarity on rectification powers. The orders dated 10 February 2024 and 12 February 2024 were deemed invalid, and the matter was remitted to the AO for fresh consideration. The court allowed the writ petitions in part, quashing the mentioned orders and directing the AO to reexamine the rectification applications for AYs 2016-17 and 2022-23.

Additional Directions:
The court acknowledged the existing Garnishee Notices and allowed the petitioner to securitize 20% of the outstanding tax demand by maintaining a specified credit balance. The court advised the petitioner to approach the AO for further modifications and lifting of notices. The court emphasized prompt consideration and disposal of these matters within a week.

Specific Petitions:
Regarding W.P. 1846/2024, a rectification order was challenged for treating the petitioner as an assessee in default. In W.P. 1848/2024, another rectification application was disposed of. The court left it to the petitioner to pursue available legal remedies for these specific cases.

This summary encapsulates the key issues, court observations, and directives outlined in the judgment.

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