IRA MALHOTRA vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-10(1), DELHI & ANR.

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W.P.(C)/391/2023HC DelhiDLHC01000625202318 March 2025Author: HON'BLE MR. JUSTICE VIBHU BAKHRU,HON'BLE MR. JUSTICE TEJAS KARIA2 pages
AI SummaryAllowed

What did the High Court hold?

The Delhi High Court held that the controversy in the present case is covered in favour of the Assessee by the decision of this court in Ram Balram Buildhome Pvt. Ltd. v. Income Tax Officer and Anr. Consequently, the petition was allowed, and all proceedings initiated pursuant to the impugned notice were set aside. The ratio decidendi is that if a similar issue regarding limitation for reassessment proceedings has been decided in favour of the assessee by a coordinate bench of the High Court, the same principle will apply. The operative direction was to set aside the proceedings.

What were the facts?

The petitioner, Ira Malhotra (Assessee), challenged a notice dated July 26, 2022, issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2015-16. An initial notice under Section 148 was issued on June 25, 2021, which was unsustainable as it predated the new regime under Section 148A. Following the Supreme Court's decision in Union of India & Ors. v. Ashish Agarwal, the Assessing Officer (AO) provided information and issued a fresh notice under Section 148A(b) on May 27, 2022. The Assessee responded on June 11, 2022. The AO then passed an order under Section 148A(d) on July 26, 2022. The Assessee contended that this order was issued beyond the prescribed limitation period.

What were the issues?

1. Whether the order passed by the Assessing Officer under Section 148A(d) of the Income Tax Act, 1961, on July 26, 2022, was issued beyond the prescribed period of limitation for Assessment Year 2015-16. Assessee's Contention: The Assessee argued that the impugned notice and the subsequent order under Section 148A(d) were issued beyond the period of limitation stipulated for reassessment proceedings. The Assessee relied on the decision of this court in Ram Balram Buildhome Pvt. Ltd. v. Income Tax Officer and Anr. Revenue's Contention: The judgment does not record any specific arguments made by the Revenue on this issue.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A,Section 148A(b),Section 148A(d)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
$~25 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 391/2023 IRA MALHOTRA .....Petitioner Through: Mr. Amol Sinha, Mr. Ankit Kumar, Advocates. versus ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-10(1), DELHI & ANR. .....Respondents Through: Mr. Gaurav Gupta, SSC, Mr. Shivendra Singh, JSC and Mr. Yojit Pareek, JSC for Income Tax Department. CORAM: HON'BLE MR. JUSTICE VIBHU BAKHRU HON'BLE MR. JUSTICE TEJAS KARIA

O R D E R % 18.03.2025

1.

The petitioner [Assessee] has filed the present petition, inter alia, impugning a notice dated 26.07.2022 [the impugned notice] issued under Section 148 of the Income Tax Act, 1961 [the Act] in respect of the Assessment Year [AY] 2015-16. It is the Assessee’s case that the impugned notice has been issued beyond the prescribed period of limitation.

2.

The initial notice under Section 148 of the Act for AY 2015-16 was issued on 25.06.2021. The said notice was unsustainable as it was issued in accordance with the statutory regime as it stood prior to 31.03.2021. This court in the case of Mon Mohan Kohli v. Assistant Commissioner of Income Tax & Anr.: Neutral Citation No.: 2021:DHC:4181-DB had set aside such notices that were issued after 31.03.2021 without following the procedure as prescribed under Section 148A of the Act. However, the Supreme Court in the case of Union of India & Ors. v. Ashish Agarwal: 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 23:15:05

(2023) 1 SCC 617, issued directions for considering the said notices as the notices issued under Section 148A(b) of the Act and further granted time to the Assessing Officer to supply the material on which such notices were premised.

3.

In compliance with the directions issued by the Supreme Court in the case of Union of India & Ors. v. Ashish Agarwal (supra), the Assessing Officer (AO) provided information and material to the Assessee and also issued a fresh notice under Section 148A(b) of the Act on 27.05.2022. The Assessee was granted two weeks time to respond to the said notice. The Assessee responded to the notice dated 27.05.2022 by a letter dated 11.06.2022. 4. The AO passed an order under Section 148A(d) of the Act on 26.07.2022. According to the Assessee, the same was beyond the period as stipulated.

5.

Concededly, the said controversy is covered in favour of the Assessee by the decision of this court in Ram Balram Buildhome Pvt. Ltd. v. Income Tax Officer and Anr.: Neutral Citation No.: 2025:DHC:547-DB.

6.

The present petition is, accordingly, allowed and all proceedings initiated pursuant thereto are set aside. VIBHU BAKHRU, J TEJAS KARIA, J MARCH 18, 2025/tr 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 23:15:05

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