PR. COMMISSIONER OF INCOME TAX (CENTRAL-1) DELHI vs. VE COMMERCIAL VEHICLES LIMITED
What did the High Court hold?
The High Court held that the ITAT had proceeded on a completely wrong factual premise. It was undisputed that the assessee had not taken proceedings before the DRP, yet the entire order of the ITAT was based on the factual foundation that the assessee had taken the DRP route. The Court found the ITAT's findings to be clearly perverse due to this factual error. Instead of admitting the appeal and potentially remanding it after a long pendency, the Court set aside the ITAT's order and remanded the matter back to the ITAT to decide it afresh. The Court clarified that it had not pronounced upon any of the parties' contentions regarding the assessment being barred by limitation, and both parties would be free to make their submissions on this and other issues before the ITAT, which would decide all issues in accordance with law.
What were the facts?
The appeals were filed by the Pr. Commissioner of Income Tax (Central-1), Delhi against an order of the Income Tax Appellate Tribunal (ITAT), Delhi Bench “I”. The ITAT had allowed the appeal of the respondent-assessee, VE Commercial Vehicles Limited. The Revenue contended that the ITAT had misread the record and erred in appreciating the facts, as it proceeded on the premise that the assessee had appeared before the Dispute Resolution Panel (DRP). However, the assessee had opted for the appellate route before the Commissioner of Income Tax (Appeals) (CIT(A)) after receiving the draft assessment order. The Revenue argued that the ITAT’s reliance on a judgment concerning the DRP route was therefore misplaced.
What were the issues?
1. Whether the ITAT erred in allowing the assessee's appeal based on a factual premise that the assessee had approached the Dispute Resolution Panel (DRP), when the assessee had in fact opted for the appellate route before the Commissioner of Income Tax (Appeals) (CIT(A))? (Question of mixed law and fact, concerning the interpretation of the assessment proceedings and the applicability of ITAT's findings). Assessee's Contentions (Revenue's arguments): The Revenue argued that the ITAT had completely misread the record and erred in appreciating facts by assuming the assessee went through the DRP route. They submitted that the assessee had intimated the Assessing Officer of its intention to take the appellate route. The Revenue further argued that the ITAT's reliance on the judgment in CIT v. Roca Bathroom Products P Ltd. (supra), which dealt with DRP route cases, was incorrect in this context. Respondent's Contentions (Assessee's arguments): The Assessee accepted that they had taken the appellate route and not gone before the DRP. However, they argued that the route adopted by the assessee would have no bearing on the issue of limitation, as the Assessing Officer was mandated to pass the order within 30 days of receiving the acceptance of the draft assessment order. They also argued that the principles of limitation and the law laid down in Roca Bathroom (supra) were equally applicable to cases where the assessee took the appellate route.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
O R D E R %
2026
CM APPL. 56466/2026 in ITA 674/2026 (delay of 45 days in filing the appeal) CM APPL. 56468/2026 in ITA 675/2026 (delay of 45 days in filing the appeal) CM APPL. 56473/2026 in ITA 676/2026 (delay of 45 days in filing the appeal)
These are the applications seeking condonation of delay of 45 days in filing the appeals. This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 24/08/2026 at 10:49:05
For the reasons stated in the applications, the delay of 45 days is condoned.
Applications stand disposed of. ITA 674/2026 ITA 675/2026 AND ITA 676/2026
Mr. Puneet Rai, learned Senior Standing Counsel for the Department, assailing the order of the Income Tax Appellate Tribunal, Delhi Bench “I”, Delhi (hereinafter referred to as the “Tribunal”) dated 23.01.2026 passed in the appeals under consideration, submitted that the Tribunal has completely misread the record and erred in appreciation of facts inasmuch in paras 3 to 8 of the impugned order, it proceeded as if the assessee had appeared before the Dispute Resolution Panel (hereinafter referred to as “DRP”), whereas the respondent-assessee had taken the route of Appellate Authority i.e., Commissioner of Income Tax (Appeals) (hereinafter referred to as “CIT(A)”).
He submitted that immediately on receipt of the draft assessment order dated 14.12.2017, the respondent-assessee had intimated the Assessing Officer through a letter, that it would be taking the appellate route rather than going before the DRP.
He submitted that since the Tribunal has allowed the assessee’s appeal relying upon the judgment rendered in the case of CIT v. Roca Bathroom Products P Ltd. reported in (2022) 140 taxmann.com 304 (Mad.) and the law on the subject which involve cases arising out of the DRP route, the respondent’s appeal could not have been allowed.
Learned counsel for the respondent, on the other hand, though accepted This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 24/08/2026 at 10:49:05
the fact that the respondent-assessee had taken the appellate route and had not gone before the DRP, but submitted that in any event, whatever might have been the route or course adopted by the assessee, it would have no bearing on the issue of limitation, since the law enjoined upon the Assessing Officer to pass the order within 30 days from the end of the month in which the Assessing Officer received the acceptance of the draft assessment order.
He argued that principles of limitation or the law laid down in the Roca Bathroom (supra) is equally applicable on the cases in which the assessee had taken the appellate route.
Having heard the learned counsel for the parties, we are of the view that the Tribunal has completely proceeded on wrong factual premise. Undeniably, the assessee had not taken proceedings before the DRP, whereas the entire order of the Tribunal proceeds on the factual foundation that the assessee had taken the DRP route. A perusal of paras 3 to 8 and concluding para of the order/discussion shows that it is based on the basis that the assessee had taken the DRP route. The findings of the Tribunal are, therefore, clearly perverse.
We could have admitted the appeal, which would have unnecessarily kept the appeal pending for years and then, the matter would have to be remanded. Rather than doing this, we hereby set aside the order of the Tribunal and remand the matter back to the Tribunal, so as to decide it afresh.
While doing so, we make it clear that we have not pronounced upon any of the parties’ contentions regarding the assessment being barred by limitation, therefore, both the parties’ shall be free to make their submissions on the issue of limitation or other issues in accordance with law. The Tribunal shall decide all the issues in accordance with law. This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 24/08/2026 at 10:49:05
The appeals stand disposed of along with pending applications.
DINESH MEHTA, J.
RAJNEESH KUMAR GUPTA, J. AUGUST 21, 2026 neelam
This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 24/08/2026 at 10:49:05
More judgments on Section 144C
- Mishoo Sahay, Bangalore vs ACIT, Circle 2(1), It, KolkataITTPA 19/KOL/2026[2013-2014]Status: Disposed15 Oct 2026AY 2013-2014
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- Anshu Sahay, Bangalore vs ACIT, Circle 2(1), It, KolkataITTPA 16/KOL/2026[2014-2015]Status: Disposed15 Oct 2026AY 2014-2015
- Anshu Sahay, Bangalore vs ACIT, Circle 2(1), It, KolkataITTPA 15/KOL/2026[2013-2014]Status: Disposed15 Oct 2026AY 2013-2014
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