Hotel cook faces Rs 4 crore tax demand, he alleges PAN misuse; what Delhi High Court ruled

What happened: A Delhi hotel cook received an income tax notice demanding nearly Rs 4 crore, with a penalty for under-reporting, over alleged cash sales of Rs 24.62 crore linked to his PAN. He alleged PAN misuse and the Delhi High Court cancelled the demand. Key numbers: Tax demand nearly Rs 4 crore; alleged cash sales Rs 24.62 crore; TDS at 1% on the reported amount; around Rs 78 Why it matters: The court found the assessment relied entirely on Form 26AS and portal information, with no independent evidence, and said such facts called for careful scrutiny rather than mechanical assessment.

A Delhi hotel cook received an income tax notice demanding nearly Rs 4 crore, with a penalty for under-reporting, over alleged cash sales of Rs 24.62 crore linked to his PAN. He alleged PAN misuse and the Delhi High Court cancelled the demand.

The court found the assessment relied entirely on Form 26AS and portal information, with no independent evidence, and said such facts called for careful scrutiny rather than mechanical assessment.