Delhi High Court Refuses To Quash Reassessment Against Homebuyer Over Alleged Cash Payment To Builder

The Delhi High Court has refused to interfere with reassessment proceedings initiated against a taxpayer after documents seized from real estate group Bhutani Infra allegedly reflected a cash transaction linked to a flat purchase.A Division Bench of Justices Dinesh Mehta and Vinod Kumar observed that the notice issued under Section 148 of the Income Tax Act cannot be termed as without jurisdiction at the threshold.The petitioner/taxpayer had argued that the sole basis for reopening the assessment was an Excel sheet recovered during a search at the premises of Bhutani Infra Group and Associates, which mentioned the Petitioner's name along with a cash transaction of Rs 7.97 lakh. According to the her, in the absence of any further incriminating material or proof establishing a nexus with the alleged transaction, the Assessing Officer could not have initiated reassessment proceedings.During the hearing, however, the taxpayer admitted that she had indeed purchased a flat from the said builder, while maintaining that this fact alone could not justify reopening of assessment.Rejecting the challenge, the court held that the material relied upon by the Assessing Officer was sufficient, at the notice stage, to infer possible escapement of income. “Language of section 148 of the Income Tax Act after 01.04.2021, does not even require recording reason to believe much less possession of information or evidence,” the Court pointed.It however clarified that it would be open to the Petitioner to satisfy the tax authorities during reassessment proceedings that the alleged cash entry was erroneous or that she had no nexus with the transaction in question. As such, it dismissed the plea.Case title: Veena Arora v. Commissioner Income Tax - 12 Delhi & Anr.Citation: 2026 LLBiz HC (DEL) 17Case Number: W.P.(C) 22/2026For Petitioner: Advocated Prince Mohan Sinha, Rajeev Deora, Shiv Nath Bind.For Respondent: Advocate Indruj Singh Rai, Sr. Standing Counsel with Advocates Sanjeev Menon, Rahul Singh, Gaurav KumarClick here to read order

Delhi High Court Refuses To Quash Reassessment Against Homebuyer Over Alleged Cash Payment To Builder

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