SAROJ MEHNDI vs. INCOME TAX OFFICER, WARD 49.1 & ORS.

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W.P.(C)/5429/2025HC DelhiDLHC01024213202522 May 2025Author: HON'BLE MR. JUSTICE VIBHU BAKHRU,HON'BLE MR. JUSTICE TEJAS KARIA5 pages
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What did the High Court hold?

The High Court held that the impugned notice dated 13.07.2022 issued under Section 148 of the Income Tax Act, 1961, and all proceedings relating thereto, are required to be quashed and set aside. The Court relied on the concession made by the Revenue before the Supreme Court in Union of India and Ors. v. Rajeev Bansal (2024 INSC 754), specifically paragraph 19(f), where the Revenue conceded that for AY 2015-16, all notices issued on or after April 1, 2021, would have to be dropped as they would not fall for completion within the period prescribed under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. The Court also noted a similar decision in Deepak Steel and Power Ltd. v. Central Board of Direct Taxes and Ors. (Civil Appeal No.5177/2025), where the Supreme Court allowed appeals based on the same concession. The Court found that the controversy was covered in favour of the petitioner by its own prior decision in Makemytrip India Pvt. Ltd. v. Deputy Commissioner of Income Tax Circle 16 (1) Delhi & Anr. The petition was allowed, and all proceedings were set aside.

What were the facts?

The petitioner, Saroj Mehndi, filed a writ petition challenging a notice dated 13.07.2022 issued under Section 148 of the Income Tax Act, 1961, for Assessment Year (AY) 2015-16. The petitioner had filed her return for AY 2015-16 on 28.03.2017. An earlier notice under Section 148 was issued on 08.06.2021, which the Assessing Officer (AO) later deemed to be a notice under Section 148A(b) in light of the Supreme Court's decision in Union of India & Ors. v. Ashish Agarwal. The AO then passed an order under Section 148A(d) on 14.07.2022, holding it fit to issue a notice under Section 148, which was done on 13.07.2022. The petitioner argued that these proceedings should be set aside based on a concession made by the Revenue before the Supreme Court.

What were the issues?

1. Whether the notice dated 13.07.2022 issued under Section 148 of the Income Tax Act, 1961, for AY 2015-16, and the consequential proceedings, are liable to be quashed in view of the concession made by the Revenue before the Supreme Court in Union of India and Ors. v. Rajeev Bansal. Assessee's Contention: The petitioner contended that the proceedings initiated pursuant to the impugned notice dated 13.07.2022 are required to be set aside in view of the concession made by the Revenue before the Supreme Court in Union of India and Ors. v. Rajeev Bansal (2024 INSC 754). Specifically, paragraph 19(f) of the said decision records the Revenue's concession that for AY 2015-16, all notices issued on or after 1 April 2021 will have to be dropped as they will not fall for completion during the period prescribed under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA). Revenue's Contention: The judgment does not record any specific arguments made by the Revenue against the petitioner's contentions. However, the Revenue's concession in the cited Supreme Court case is the basis for the petitioner's argument.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A,Section 149

AI-generated summary — verify with the full judgment below

W.P. (C) 5429/2025 $~43 * IN THE HIGH COURT OF DELHI AT NEW DELHI % Date of Decision: 22.05.2025 + W.P.(C) 5429/2025 with CM APPL. 24746/2025 SAROJ MEHNDI .....Petitioner Through: Mr Pradeep Singh Rawat with Mr Girish Chandra and Mr Pankaj Pandey, Advocates. versus INCOME TAX OFFICER, WARD 49.1 & ORS. .....Respondents Through: Mr Shlok Chandra, SSC with Ms Naincy Jain, Ms Madhavi Shukla and Mr Ujjwal Jain, Advocates. CORAM: HON'BLE MR. JUSTICE VIBHU BAKHRU HON'BLE MR. JUSTICE TEJAS KARIA VIBHU BAKHRU, J. (ORAL)

1.

The petitioner has filed the present petition, inter alia, impugning a notice dated 13.07.2022 [impugned notice] issued under Section 148 of the Income Tax Act, 1961 [the Act] and further proceedings relating to the said notice in respect of assessment year [AY] 2015-16. 2. The petitioner is an individual and filed its return of income for the AY 2015-16 on 28.03.2017, declaring income of ₹4,61,730/-.

3.

The Assessing Officer [AO] issued a notice dated 08.06.2021 under Section 148 of the Act seeking to reopen the assessment for AY 2015-16. W.P. (C) 5429/2025 Although the said notice was issued after 31.03.2021, the procedure as prescribed under Section 148A of the Act was not followed, as the notice was premised on the provisions relating to reassessment as were in force prior to 31.03.2021. 4. Thereafter, by a communication dated 24.05.2022, the AO referred to the decision of the Supreme Court in Union of India & Ors. v. Ashish Agarwal: (2022) 444 ITR 1 and forwarded certain information, which, according to the AO, suggested that the petitioner’s income had escaped assessment. The said communication also mentioned that in terms of the aforementioned decision in Union of India & Ors. v. Ashish Agarwal (supra), the notice dated 08.06.2021 issued under Section 148 of the Act was deemed to be a notice under Section 148A(b) of the Act. The petitioner did not respond to the said communication, as she was unaware of the ongoing proceedings.

5.

The AO passed an order dated 14.07.2022 under Section 148A(d) of the Act holding that it was a fit case for issuance of a notice under Section 148 of the Act in respect of AY 2015-16. The said order was forwarded to the petitioner along with a notice dated 13.07.2022 issued under Section 148 of the Act.

6.

The petitioner contends that the proceedings initiated pursuant to the impugned notice dated 13.07.2022 are required to be set aside in view of the concession made by the Revenue before the Supreme Court in Union of India and Ors. v. Rajeev Bansal: 2024 INSC 754. 7. It is relevant to refer to paragraph 19(e) and 19(f) from the decision of W.P. (C) 5429/2025 the Supreme Court in Union of India and Ors. v. Rajeev Bansal (supra), which sets out the concession as made on behalf of the Revenue: “e. The Finance Act 2021 substituted the old regime for re- assessment with a new regime. The first proviso to Section 149 does not expressly bar the application of TOLA. Section 3 of TOLA applies to the entire Income-tax Act, including Sections 149 and 151 of the new regime. Once the first proviso to Section 149(1)(b) is read with TOLA, then all the notices issued between 1 April 2021 and 30 June 2021 pertaining to assessment years 2013-14, 2014-15, 2015-16, 2016-17, and 2017-18 will be within the period of limitation as explained in the tabulation below: Assessment year Within 3 Years Expiry of Limitation read with TOLA for (2) Within six Years Expiry of Limitation read with TOLA for (4) (1) (2) (3) (4) (5) 2013-2014 31-3-2017 TOLA not applicable 31-3-2020 30-6-2021 2014-2015 31-3-2018 TOLA not applicable 31-3-2021 30-6-2021 2015-2016 31-3-2019 TOLA not applicable 31-3-2022 TOLA not applicable 2016-17 31-3-2020 30-6-2021 31-3-2023 TOLA not applicable 2017-2018 31-3-2021 30-6-2021 31-3-2024 TOLA not applicable f. The Revenue concedes that for the assessment year 2015-16, all notices issued on or after 1 April 2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA;”

8.

In view of the above concession, the impugned notice and the proceedings relating thereto are required to be set aside. We may also note the decision of the Supreme Court in Deepak Steel and Power Ltd. v. Central Board of Direct Taxes and Ors.: Civil Appeal No.5177/2025, W.P. (C) 5429/2025 decided on 02.04.2025. The said appeal arose from orders passed by the Hon’ble High Court of Orissa and Cuttack declining to entertain batch of petitions filed by the Assesses. The attention of the Supreme Court was drawn to the concession made on behalf of the Revenue in Union of India & Ors. v. Rajeev Bansal (supra) and noting the same, the Supreme Court allowed the appeals. The relevant extract of the said decision is set out below:

“4. The learned counsel appearing for the revenue with his usual fairness invited the attention of this Court to a three judge bench decision of this Court in Union of India and Ors. v. Rajeev Bansal, reported in 2024 SCC OnLine SC 2693, more particularly, paragraph 19(f) which reads thus:- “19. (f) The Revenue concedes that for the assessment year 2015-2016, all notices issued on or after April 1, 2021 will have to be dropped as they will not fall for completion during the period prescribed under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020.”

5.

As the revenue made a concession in the aforesaid decision that is for the assessment year 2015-2016, all notices issued on or after 1st April, 2021 will have to be dropped as they would not fall for completion during the period prescribed under the taxation and other laws (Relaxation and Amendment of certain Provisions Act, 2020). Nothing further is required to be adjudicated in this matter as the notices so far as the present litigation is concerned is dated 25.6.2021. 6. In view of the aforesaid, in such circumstances referred to above the original writ petition nos.2446 of 2023, 2543 of 2023 and 2544 of 2023 respectively filed before the High Court of Orissa at cuttack W.P. (C) 5429/2025 stands allowed.”

9.

The notice dated 13.07.2022 issued under Section 148 of the Act stands quashed and set aside. Concededly, the controversy is covered in favour of the petitioner by the decision of this court in Makemytrip India Pvt. Ltd. v. Deputy Commissioner of Income Tax Circle 16 (1) Delhi & Anr.: Neutral Citation No.: 2025:DHC:1892-DB.

10.

The petition is, accordingly, allowed and all proceedings initiated pursuant thereto are set aside. Pending application is also disposed of. VIBHU BAKHRU, J TEJAS KARIA, J MAY 22, 2025 M

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