MOUSHUMI CHOPRA vs. DEPUTY DIRECTOR OF INCOME TAX (INV) FAIU 3 (1) NEW DELHI

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W.P.(C)/7038/2026HC DelhiDLHC01023021202620 May 2026Author: HON'BLE MR. JUSTICE DINESH MEHTA,HON'BLE MR. JUSTICE VINOD KUMAR3 pages

AI SummaryPartly Allowed

What did the High Court hold?

The High Court decided to substitute paragraphs 1 and 2 of its earlier order dated 20.05.2026. The substituted paragraphs state that the officer concerned did not understand or know the basic position of law and should have issued the notice under the old Act, specifically Section 536(ii)(c) of the Income Tax Act, 2025. The impugned notice dated 07.04.2026 was quashed, and liberty was granted to issue a fresh notice in accordance with the law. The Court cautioned the Assessing Officer to be careful in the future and directed that a copy of the order be sent to the Principal Chief Commissioner of Income Tax to ensure officers do not file frivolous applications. The application for correction was disposed of.

What were the facts?

The Department (Respondent) filed an application seeking correction to an earlier order dated 20.05.2026. The earlier order had observed that the Assessing Officer (AO) did not know the basic provisions of law and issued a notice under the new Act instead of the old Act for proceedings relating to a period prior to 01.04.2026. The learned Senior Standing Counsel (SSC) for the Department had made submissions to defend the AO, stating the notice was issued due to inadvertence or misconception. However, the Department later questioned the SSC on who authorized these submissions. The High Court, while appreciating the SSC's effort, noted that a counsel's statement to defend an officer should not be taken as an affront. The Court agreed to substitute paragraphs 1 and 2 of the earlier order.

What were the issues?

1. Whether the earlier order's observations regarding the Assessing Officer's understanding of the law and the issuance of a notice under the wrong Act should be modified or corrected. The Revenue (Department) argued that the submissions made by the learned Senior Standing Counsel (SSC) on 20.05.2026, which led to the observations in the earlier order, were made to defend the AO and save face, stating the notice was issued due to inadvertence or misconception. The Revenue later questioned the SSC on the authority for these submissions. The Revenue's contention appears to be that the earlier order's recorded statements, which were made to defend the AO, were being misinterpreted or taken as an affront by the AO and other officials, necessitating a correction to the order. The Assessee's arguments are not recorded in this judgment.

Which sections of the Income-tax Act were involved?

536(ii)(c)

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Cause title — parties, addresses and appearances

$~1 (SB) * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 7038/2026 MOUSHUMI CHOPRA .....Petitioner Through: Mr. Rajat Navet & Mr. Rajat Rana, Advs. versus DEPUTY DIRECTOR OF INCOME TAX (INV) FAIU 3 (1) NEW DELHI .....Respondent Through: Mr. Gaurav Gupta, SSC with Mr.Shivendra Singh, JSC, Mr. Yojit Pareek, JSC CORAM: HON'BLE MR. JUSTICE DINESH MEHTA HON'BLE MR. JUSTICE VINOD KUMAR

O R D E R %

24.07.

2026 CM APPL. 38380/2026

An application has been moved by the department seeking requisite correction/modification in Paragraphs No. 1 and 2 in the order dated 20.05.2026. 2. Mr. Gaurav Gupta, learned Senior Standing Counsel, submitted that on Court’s oral observation on 20.05.2026, that the Assessing Officer either did not know the basic provision of law or was careless, due to which he had issued notice under the new act and not under the old act, though the proceedings related to period prior to 01.04.2026, he made a submission as was recorded in Para Nos. 1 and 2 only in order to defend the officer or do his face saving and stated that “the notice was issued due to inadvertence or 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 30/07/2026 at 15:34:16

misconception” and the Assessing Officer must have issued notice under the New Act.

He submitted that later on, the department has put him to queries that who had given him these instructions to say so on behalf of the department.

While appreciating the endeavour on the part of Mr. Gaurav Gupta, learned Senior Standing Counsel, we would like to observe that a statement made by counsel to defend the officer should not be taken as an affront – in a manner, as has been taken by the Assessing Officer and other officials of the Department.

In any case, he had not made any comment upon the officer, he rather tried to justify the mistake of the officer.

Be that as it may, Paragraphs No.1 and 2 of the order dated 20.05.2026 be treated to be an observation of the Court.

The paragraph nos. 1 & 2 of the order dated 20.05.2026 shall be substituted by following para –

“1. The officer concerned did not understand or know the basic position of law. He should have issued the notice under the provision of the old act i.e. Income Tax Act, 1961 and should have carefully read Section 536(ii)(c) of the Income Tax Act, 2025. 2. Impugned notice dated 07.04.2026 is hereby quashed. A liberty is given to issue a fresh notice in accordance with law.”

While cautioning the Assessing Officer concerned to remain careful in future, the present application is disposed of.

A copy of this order be sent to Principal Chief Commissioner of Income Tax, to ensure that the Officers do not file or insist on filing 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 30/07/2026 at 15:34:16

frivolous applications which leads to wastage of public money and judicial time.

DINESH MEHTA, J.

VINOD KUMAR, J. JULY 24, 2026/nk 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 30/07/2026 at 15:34:16

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