HERIKA NARANG vs. ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 28 DELHI & ORS.

PDF · subscribers
W.P.(C)/17544/2024HC DelhiDLHC01095313202426 March 2025Author: HON'BLE MR. JUSTICE VIBHU BAKHRU,HON'BLE MR. JUSTICE TEJAS KARIA4 pages
AI SummaryAllowed

What did the High Court hold?

The Delhi High Court held that the controversy in the present petition is covered by its earlier decision in ARN Infrastructures India Ltd. v. Assistant Commissioner of Income Tax Central Circle-28 Delhi & Ors. The Court reiterated that the Supreme Court's observations in Abhisar Buildwell (P.) Ltd. were not a carte blanche to override the restrictions in Section 149 of the Act. The liberty accorded to the Revenue to initiate reassessment was subject to fulfilling the conditions stipulated in Sections 147 and 148 of the Act. The Court found the Revenue's contention that the time period under Section 149 is not applicable to be erroneous. Consequently, the petition was allowed, and the impugned notice was set aside. The operative direction was the setting aside of the notice. No issue was expressly left undecided.

What were the facts?

The petitioner, Herika Narang, filed a writ petition challenging a notice dated August 30, 2024, issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2016-17. The petitioner contended that the notice was issued beyond the period stipulated under Section 149(1) of the Act. The Revenue argued that the notice was issued within the stipulated time due to the non-obstante clause under Section 150 of the Act, relying on the Supreme Court's decision in Principal Commissioner of Income-tax, Central-3 v. Abhisar Buildwell (P.) Ltd. The Revenue interpreted this decision as a direction to issue such notices in cases related to search or requisition under Sections 132 or 132A of the Act, even if otherwise time-barred.

What were the issues?

1. Whether the Supreme Court's decision in Principal Commissioner of Income-tax, Central-3 v. Abhisar Buildwell (P.) Ltd. constitutes a finding or direction for issuing notices under Section 148 of the Income Tax Act, 1961, in cases that are otherwise beyond the period stipulated under Section 149 of the Act? Assessee's Contention: The notice issued under Section 148 is beyond the period stipulated under Section 149(1) of the Act. The Revenue's reliance on the Abhisar Buildwell decision to bypass Section 149 is misplaced. Revenue's Contention: The impugned notice has been issued within the stipulated time by virtue of the non-obstante clause under Section 150 of the Act, as it is premised on the 'findings and directions' in the Supreme Court's decision in Principal Commissioner of Income-tax, Central-3 v. Abhisar Buildwell (P.) Ltd. The Revenue construes this decision as a direction for issuing such notices in cases related to search or requisition.

Which sections of the Income-tax Act were involved?

Section 148,Section 149,Section 150,Section 132,Section 132A,Section 147

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
$~98 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 17544/2024 & CM APPL. 74712/2024 HERIKA NARANG .....Petitioner Through: Mr. Ved Jain, Mr. Nischay Kantoor, Ms. Soniya Dodeja, Advocates. versus ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 28 DELHI & ORS. .....Respondents Through: Mr. Anurag Ojha, SSC; Mr. V.K. Saksena, JSC; Ms. Hemlata Rawat, JSC with Mr. Dipak Raj, Mr. Subham Kr., Advocates. CORAM: HON'BLE MR. JUSTICE VIBHU BAKHRU HON'BLE MR. JUSTICE TEJAS KARIA

O R D E R % 26.03.2025

1.

The petitioner has filed the present petition, inter alia, impugning notice dated 30.08.2024 [hereafter the impugned notice] issued under Section 148 of the Income Tax Act, 1961 [hereafter the Act] in respect of assessment years (AY) 2016-17. 2. The impugned notice is clearly beyond the period as stipulated under Section 149(1) of the Act. However, it is the Revenue’s case that the impugned notice has been issued within the stipulated time by virtue of the non-obstante clause under Section 150 of the Act. The Revenue claims that the impugned notice is premised on the ‘findings and directions’ as embodied in the decision of the Supreme Court in Principal Commissioner of Income-tax, Central-3 v. Abhisar Buildwell (P.) Ltd.: (2024) 2 SCC 433. In the said decision, the Supreme Court had held that in certain cases, the assessing officer (AO) could exercise its powers under Section 147/148 of 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 01/07/2025 at 19:04:59

the Act, even in cases which are related to a search conducted under Section 132 of the Act or a requisition made under Section 132A of the Act. The Revenue construes the said decision as constituting a finding or a direction for issuing such notices in respect of cases such as that of the assessee’s.

3.

The question whether the decision in the case of Principal Commissioner of Income-tax, Central-3 v. Abhisar Buildwell (P.) Ltd. (supra) constitutes a finding and/or a direction for issuance of notices under Section 148 of the Act in cases, which are otherwise beyond the period as stipulated under Section 149 of the Act is no longer res integra. This Court in the case of ARN Infrastructures India Ltd. v. Assistant Commissioner of Income Tax Central Circle-28 Delhi & Ors.: Neutral Citation No.:2024:DHC:7423-DB had rejected a similar contention. The relevant extract of the said decision is set out below:

“38. It is pertinent to note that a reference to Sections 147 and 148 of the Act in Abhisar Buildwell firstly appears in paragraph 33 of the report and where the Supreme Court observed that in cases where a search does not result in any incriminating material being found, the only remedy that would be available to the Revenue would be to resort to reassessment.

39.

However, the Supreme Court caveated that observation by observing that the initiation of reassessment would be “…..subject to fulfilment of the conditions mentioned in Sections 147/148, as in such a situation, the Revenue cannot be left with no remedy”. This sentiment came to be reiterated with the Supreme Court observing that the power of the Revenue to initiate reassessment must be saved failing which it would be left with no remedy. It was thereafter observed in paragraph 36.4 of the report that 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 01/07/2025 at 19:04:59

insofar as completed or unabated assessments were concerned, they could be reopened by the AO by invocation of Sections 147/148 of the Act, subject to the fulfillment of the conditions “……as envisaged/mentioned under Sections 147/148 of the Act and those powers are saved”.

40.

It thus becomes apparent that the liberty which the Supreme Court accorded and the limited right inhering in the Revenue to initiate reassessment was subject to that power being otherwise compliant with the Chapter pertaining to reassessment as contained in the Act. The observations of the Supreme Court cannot possibly be read or construed as a carte blanche enabling the respondents to overcome and override the restrictions that otherwise appear in Section 149 of the Act. The observations of the Supreme Court in Abhisar Buildwell were thus intended to merely convey that the annulment of the search assessments would not deprive or denude the Revenue of its power to reassess and which independently existed. However, the Supreme Court being mindful of the statutory prescriptions, which otherwise imbue the commencement of reassessment, qualified that observation by providing that such an action would have to be in accordance with law. This note of caution appears at more than one place in that judgment and is apparent from the Supreme Court observing that the power to reassess would be subject to the fulfilment of the conditions mentioned in Sections 147 and 148 of the Act.”

4.

Plainly, the controversy involved in this petition is covered by the decision of this court in ARN Infrastructures India Ltd. v. Assistant Commissioner of Income Tax Cental Circle-28 Delhi & Ors. (supra). The contention that the time period as stipulated under Section 149 of the Act is not applicable, in the given facts, is erroneous and thus rejected. 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 01/07/2025 at 19:04:59

5.

The petition is, accordingly, allowed and the impugned notice is set aside. Pending application stands also disposed of. VIBHU BAKHRU, J TEJAS KARIA, J MARCH 26, 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. The Order is downloaded from the DHC Server on 01/07/2025 at 19:04:59

More judgments on Section 148

All 35,022 judgments and leading authorities on Section 148 →

Recent GST High Court judgments

Search GST case law →