TILAK RAJ JAIN vs. ITO WARD 34(5) NEW DELHI & ANR.

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W.P.(C)/1782/2023HC DelhiDLHC01004332202320 May 2025Author: HON'BLE MR. JUSTICE VIBHU BAKHRU,HON'BLE MR. JUSTICE TEJAS KARIA5 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that the impugned notice dated July 19, 2022, issued under Section 148 of the Act, and all proceedings relating thereto, are liable to be quashed and set aside. The Court's reasoning was based on the concession made by the Revenue before the Supreme Court in Union of India and Ors. v. Rajeev Bansal. The Court specifically referred to paragraph 19(f) of the Rajeev Bansal decision, 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 during the period prescribed under TOLA. The Court also noted the Supreme Court's decision in Deepak Steel and Power Ltd. v. Central Board of Direct Taxes and Ors., which allowed appeals based on this same concession. Therefore, the petition was allowed, and all initiated proceedings were set aside. No issue was expressly left undecided.

What were the facts?

The petitioner, Tilak Raj Jain, filed a writ petition challenging a notice dated July 19, 2022, issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings for Assessment Year (AY) 2015-16. The petitioner had filed its return for AY 2015-16 on September 20, 2015, declaring an income of ₹14,10,400. An earlier notice under Section 148 was issued on April 9, 2021. The Assessing Officer (AO) later issued a communication on May 19, 2022, deeming the April 9, 2021 notice as one under Section 148A(b) in light of the Supreme Court's decision in Union of India & Ors. v. Ashish Agarwal. The petitioner responded, and the AO passed an order on July 19, 2022, under Section 148A(d), deeming it a fit case for issuing a notice under Section 148, which was then issued on the same date.

What were the issues?

1. Whether the notice dated July 19, 2022, issued under Section 148 of the Income Tax Act, 1961, and the consequent proceedings for AY 2015-16 are liable 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. The petitioner contended that the proceedings should be set aside based on the concession made by the Revenue in Union of India and Ors. v. Rajeev Bansal (2024 INSC 754). Specifically, the petitioner relied on paragraph 19(f) of that judgment, which stated 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 during the period prescribed under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA). The Revenue did not record any specific arguments against the petitioner's contention in the judgment.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A,Section 149

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
$~94 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 1782/2023 TILAK RAJ JAIN .....Petitioner Through: Mr Ruchesh Sinha and Ms Monalisa Maity, Advocates. Versus ITO WARD 34(5) NEW DELHI & ANR. .....Respondents Through: Mr Sanjay Kumar, SSC with Ms Monica Benjamin, Advocate. CORAM: HON'BLE MR. JUSTICE VIBHU BAKHRU HON'BLE MR. JUSTICE TEJAS KARIA

O R D E R % 20.05.2025 CM APPL. 30984/2025

1.

For the reasons stated in the application, the same is allowed.

2.

The hearing fixed before Registrar on 01.09.2025 stands cancelled. W.P.(C) 1782/2023

3.

The petitioner has filed the present petition, inter alia, impugning a notice dated 19.07.2022 [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. 4. The petitioner is an individual, and filed its return of income for the AY 2015-16 on 20.09.2015, declaring income of ₹14,10,400/-.

5.

The Assessing Officer [AO] issued a notice dated 09.04.2021 under Section 148 of the Act seeking to reopen the assessment for AY 2015-16. 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.

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. 6. Thereafter, by a communication dated 19.05.2022, 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 09.04.2021 issued under Section 148 of the Act was deemed to be a notice under Section 148A(b) of the Act. The petitioner responded to the said notice on 02.06.2022. 7. The AO passed an order dated 19.07.2022 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 19.07.2022 issued under Section 148 of the Act.

8.

The petitioner contends that the proceedings initiated pursuant to the impugned notice dated 19.07.2022 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. 9. It is relevant to refer to paragraph 19(e) and 19(f) from the decision of the Supreme Court in Union of India and Ors. v. Rajeev Bansal (supra), 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.

which sets out the concession as made on behalf of the Revenue: “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;”

10.

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, 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 Assessees. The attention of the Supreme Court was 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.

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 stands allowed.

11.

The impugned notice dated 19.07.2022 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 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.

16 (1) Delhi & Anr.: Neutral Citation No.: 2025:DHC:1892-DB.

12.

The petition is, accordingly, allowed and all proceedings initiated pursuant thereto are set aside. VIBHU BAKHRU, J TEJAS KARIA, J MAY 20, 2025 RK Click here to check corrigendum, if any 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.

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