PHOOL CHAND INFRASTRUCTURE PRIVATE LIMITED vs. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 19(1), DELHI & ANR.

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W.P.(C)/16777/2025HC DelhiDLHC01086208202513 November 2025Author: HON'BLE MR. JUSTICE V. KAMESWAR RAO,HON'BLE MR. JUSTICE VINOD KUMAR3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that it appeared prima facie that the order passed under Section 148A(3) did not encompass the grounds taken by the petitioner. Consequently, the Court set aside the order under Section 148A(3) and the notice issued under Section 148. The matter was remanded back to the Assessing Officer for fresh consideration of the reply filed by the petitioner. The petitioner was granted liberty to submit further documents to the AO within three weeks. The AO was directed to consider the reply and documents and pass a reasoned order on the grounds urged, which would entail passing a fresh order under Section 148A(3). The portal for the petitioner's PAN was to be kept open for uploading documents. The entire exercise was to be completed within eight weeks. The ratio decidendi is that procedural fairness requires the Assessing Officer to consider all submissions made by the assessee before passing an order under Section 148A(3) and issuing a notice under Section 148.

What were the facts?

The petitioner, Phool Chand Infrastructure Private Limited, filed a writ petition before the Delhi High Court challenging a show cause notice under Section 148A(1) dated March 30, 2025, an order under Section 148A(3) dated June 27, 2025, and a notice under Section 148 dated June 27, 2025, issued by the Assistant Commissioner of Income Tax. The petitioner contended that their reply to the show cause notice was not considered before the order under Section 148A(3) and the subsequent notice under Section 148 were passed. The assessment year in question is 2019-20. The High Court heard arguments from both sides.

What were the issues?

1. Whether the order passed under Section 148A(3) and the consequential notice under Section 148 were validly issued, considering the petitioner's submission that their reply to the show cause notice under Section 148A(1) was not considered by the Assessing Officer (AO)? (Question of mixed law and fact, turning on Section 148A and Section 148 of the Income Tax Act, 1961). Assessee's Contention: The petitioner argued that their reply to the show cause notice under Section 148A(1) was not considered at all, which, had it been considered, would have prevented the passing of the order under Section 148A(3) and the issuance of the notice under Section 148. Revenue's Contention: The judgment records that arguments were heard from the revenue's counsel, but does not specify their contentions.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
$~5 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 16777/2025 CM APPL. 68919/2025 PHOOL CHAND INFRASTRUCTURE PRIVATE LIMITED .....Petitioner Through: Mr. Nitin Kanwar, Adv. versus ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 19(1), DELHI & ANR. .....Respondents Through: Mr. Puneet Rai, SSC, Mr. Gibran, JSC, Mr. Ashvini Kumar, Mr. Rishabh Nangia and Mr. Gibran, Advs. CORAM: HON'BLE MR. JUSTICE V. KAMESWAR RAO HON'BLE MR. JUSTICE VINOD KUMAR

O R D E R %

13.11.

2025

1.

This petition has been filed by the petitioner with following prayers: “1) Issue a writ of CERTIORARI or any other appropriate writ, order or direction to quash/set aside the impugned show cause notice u/s 148A(1) dated 30.03.2025 (Annexure P-6), impugned order u/s 148A (3) dated 27.06.2025 (Annexure P-2), along with the consequent impugned notice dated 27.06.2025(Annexure P-1) issued u/s 148 & impugned approval u/s 151 of the specified authority (JCIT range 19, Delhi) dated 26.06.2025, of the income tax act, 1961 and other Consequential proceedings; and 2) Issue a writ of PROHIBITION or any other appropriate writ, order or direction to restrain the respondents or any concerned Authority/Officer to conduct any further proceedings in respect of the impugned notice u/s 148 of the act, dated 27.06.2025 for the assessment year 2019-20, and further operation of the said impugned notice u/s 148 and any other consequential proceedings to be stayed during the pendency of the present writ petition; and 3) Issue a writ in the nature of MANDAMUS, commanding the respondent no. 1, to withdraw, recall, cancel and/or rescind or calling upon the respondents to transmit and certify the records relating the Impugned Show Cause Notice u/s 148A(1) vide dated 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 21/11/2025 at 12:44:07

30.03.

2025 (Annexure P-6), impugned Order u/s 148A(3) dated 27.06.2025(Annexure P-2), and Impugned notice u/s 148 dated 27.06.2025 (Annexure P-1) of the Income Tax Act, 1961 and all the purported proceedings relating thereto and to act according to law; and 4) Rule NISI in terms of prayers (a), (b) and (c) above; 5) Rule NISI be made absolute if no cause or insufficient cause is shown by the Respondents; and 6) Kindly issue, An order of injunction/stay, restraining the respondents from taking any step whatsoever pursuant to and/or in relating to the, the Impugned notice u/s 148 dated 27.06.2025 (Annexure P-1) by the respondent no. 1 and/or in any purported proceedings thereunder and/or relating thereto and/or in pursuance thereof pending the disposal of this application; and 7) Ad-interim order in terms of prayer (6) above; and 8) Costs of and incidental to this application be paid by the respondents”

2.

In substance, the challenge is to a notice issued under Section 148A(1) dated 30.03.2025; order under Section 148A(3) dated 27.06.2025 and also notice under Section 148 of the Income Tax Act, 1961 (the Act) dated 27.06.2025. 3. Various grounds have been taken by the petitioner company challenging the above notices/order. One of the submissions of Mr. Nitin Kanwar is that the replies given by the petitioner to the show cause notice under Section 148A(1) which resulted in passing of the order under Section 148A(3) has not been considered at all.

4.

According to him, had the reply being considered, the respondents would not have passed the order under Section 148A(3) and issued the consequential notice under Section 148. 5. We have heard Mr. Kanwar and Mr. Puneet Rai, for some time. It transpires prima facie that the order passed under Section 148A(3) does not encompass the grounds which have been taken.

6.

Appropriate in the facts as also keeping in view the submissions 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 21/11/2025 at 12:44:07

advanced by the counsel for the parties, is that we set aside order under Section 148A(3) and also notice issued under Section 148 and remand the matter back to the Assessing Officer (AO) for fresh consideration of the reply filed by the petitioner. The petitioner has the liberty to submit such documents as deem appropriate to the AO within a period of three weeks from today.

7.

For this purpose, the portal relatable to the PAN of the petitioner shall be kept open to enable the petitioner upload the documents. It goes without saying that the AO shall consider the reply and the documents and pass a reasoned order on the grounds urged.

8.

This shall entail passing of order under Section 148A(3). Thereafter, the parties shall proceed in accordance with law. Accordingly, in view of the aforesaid we set aside order dated 27.06.2023 under Section 148A(3) and also notice dated 27.06.2023 issued under Section 148 of the Act.

9.

The aforesaid exercise shall be carried out within a period of eight weeks as an outer limit.

10.

The petition is disposed of.

11.

Pending application is also disposed of as infructuous. V. KAMESWAR RAO, J VINOD KUMAR, J NOVEMBER 13, 2025 ss 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 21/11/2025 at 12:44:07

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