AARONE DEVELOPERS PRIVATE LIMITED vs. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 1(1) NEW DELHI & ORS.

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W.P.(C)/4448/2023HC DelhiDLHC01012388202305 March 2025Author: HON'BLE MR. JUSTICE YASHWANT VARMA,HON'BLE MR. JUSTICE HARISH VAIDYANATHAN SHANKAR4 pages
AI SummaryRemanded

What did the High Court hold?

The Delhi High Court, while dealing with identical issues in a batch of writ petitions disposed of in Kanwaljeet Kaur vs. Commissioner of Income Tax, directed the Assessing Officers (AOs) to evaluate individual show-cause notices (SCNs) under Section 148 of the Income Tax Act. This evaluation must consider the judgments in T.K.S. Builders, Abhinav Jindal, and Naveen Kumar Gupta, which settled issues regarding sanction under Section 151 and the AO's authority to undertake reassessment. Furthermore, the AOs are mandated to examine the 'surviving period' for each notice under Section 148, guided by the judgments in Rajeev Bansal and Ram Balram. The AOs are to pass reasoned and speaking orders determining whether the reassessment notices survive or should be recalled. The writ petitioners retain the liberty to challenge any adverse orders. The present writ petition was disposed of on identical terms.

What were the facts?

The petitioner, Aarone Developers Private Limited, filed a writ petition challenging the reassessment action initiated by the Assistant Commissioner of Income Tax for Assessment Year 2013-14. The primary contention of the petitioner was that the reassessment proceedings were time-barred. The petitioner provided a chart detailing the dates of various procedural steps, including the issuance of notice under Section 148A(b) on June 25, 2021, the Supreme Court's judgment in Union of India vs. Ashish Agarwal on May 4, 2022, the supply of information by the AO on May 19, 2022, the petitioner's reply on June 3, 2022, and the passing of the order under Section 148A(d) and the issuance of notice under Section 148 on July 23, 2022. The petitioner argued that the surviving period for issuing the notice under Section 148 was significantly curtailed.

What were the issues?

1. Whether the reassessment proceedings initiated against the petitioner for Assessment Year 2013-14 are barred by limitation, considering the timeline of events and the impact of the Supreme Court's decision in Union of India vs. Ashish Agarwal and subsequent pronouncements like Union of India v. Rajeev Bansal and Ram Balram Buildhome Pvt. Ltd. v. Income Tax Officer & Anr. (Assessee's contention). 2. Whether the Assessing Officer (AO) correctly applied the provisions related to the surviving period for issuing reassessment notices, particularly in light of the TOLA, 2020, and relevant CBDT notifications, as well as the judicial precedents cited by the petitioner (Assessee's contention). 3. The Revenue did not present specific arguments in the provided text, but their implicit contention is that the reassessment proceedings are valid and not time-barred.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A,Section 149,Section 151,Section 153C

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
$~30 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 4448/2023, CM APPL. 17062/2023 (Stay) AARONE DEVELOPERS PRIVATE LIMITED.....Petitioner Through: Mr. Aditya Vohra, Mr. Shashvat Dhamija, Advs. versus ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 1(1) NEW DELHI & ORS. .....Respondent Through: Mr. Vipul Aggarwal, SSC with Ms. Sakshi, Mr. Gaorang Ranjan, Advs. CORAM: HON'BLE MR. JUSTICE YASHWANT VARMA HON'BLE MR. JUSTICE HARISH VAIDYANATHAN SHANKAR

O R D E R %

05.03.

2025

1.

The instant writ petition had been preferred assailing the reassessment action initiated by the respondent pertaining to Assessment Year [„AY‟] 2013-14. We take note of the principal challenge which now remains and pertains to the issue of surviving period.

2.

The petitioner, in order to buttress its claim of the proceedings being time barred, has placed for our consideration the following chart:- Date on which the notice under the erstwhile section 148 was issued [deemed to be notice under section 148A(b) 25.06.2021 Annexure “A” 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 20:09:32

Limitation period left for the assessing officer to issue notice under Section 148, in accordance with TOLA, 2020 and CBDT Notification No. 20/2021 and 38/2021 5 days Agarwal [2022] 444 ITR 1 (SC) 04.05.2022

Date on which “information” was supplied by the assessing officer which formed the basis of the notice issued under erstwhile section 148 [in accordance with the directions provided in the judgment of Ashish Agarwal (supra)] 19.05.2022 Annexure “B” Date on which reply to notice under section 148A(b) was filed by the petitioner 03.06.2022 Annexure “G” Date by which notice under section 148 should have been issued by the assessing officer [in Appeal 8629/2024 (SC) read with 6th proviso to section 149 10.06.2022

Date on which order under section 148A(d) was passed by the assessing officer 23.07.2022 Annexure “C” 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 20:09:32

Date on which order under section 148 was actually issued by the assessing officer 23.07.2022 Annexure “D”

3.

The said question would have to be necessarily examined by the Jurisdictional Assessing Officer bearing in mind the judgment of the Supreme Court in Union of India v. Rajeev Bansal [2024 SCC OnLine SC 2693] as well as of this Court in Ram Balram Buildhome Pvt. Ltd. v. Income Tax Officer & Anr. [2025 SCC OnLine Del 481].

4.

Dealing with identical issues, we had disposed of a batch of writ petitions by our judgment rendered in Kanwaljeet Kaur vs. Commissioner of Income Tax [2025 SCC OnLine Del 605] in the following terms:

“27. We accordingly dispose of this batch of writ petitions by directing the concerned AOs to evaluate the individual SCNs' under Section 148 of the Act bearing in mind our judgments in T.K.S. Builders, Abhinav Jindal and Naveen Kumar Gupta. These decisions have conclusively settled issues pertaining to the accordal of sanction under Section 151 as well as the authority of the jurisdictional AO to commence and undertake reassessment. Those decisions also lay at rest the challenge which the writ petitioners had raised that an AO is bound to adhere to the procedure prescribed by Section 153C in cases emanating from a search.

28.

A similar exercise would have to be undertaken to examine the issue of surviving period in respect of each individual noticee under Section 148 and which would necessarily be guided by the judgments of Rajeev Bansal and Ram Balram.

29.

The concerned AOs shall consequently pass a reasoned and speaking order dealing with the impact of the judgments referred to above upon the impugned reassessment notices and in the manner indicated in paras 27 and 28 of this order. That decision shall thus render a finding on whether the impugned reassessment notices would survive or be liable to be recalled. It shall be open to the writ petitioners to assail any adverse orders that may come to be passed pursuant to the above in accordance with law.” 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 20:09:32

5.

Consequently, and in light of the above, we dispose of the writ petition on terms identical to those provided in paragraphs 27 to 29 of Kanwaljeet Kaur.

YASHWANT VARMA, J.

HARISH VAIDYANATHAN SHANKAR, J. MARCH 05, 2025/neha

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 20:09:32

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