VA PROPERTIES PRIVATE LIMITED vs. INCOME TAX OFFICER WARD 26 1 NEW DELHI & ANR.

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W.P.(C)/1238/2023HC DelhiDLHC01002740202305 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 Court noted that an Assessment Order had been passed during the pendency of the writ petition, and an appeal had been filed before the CIT(A). Consequently, the issue of the surviving period for the reassessment notice would necessarily have to be examined by the CIT(A). The Court directed the CIT(A) to decide the issue bearing in mind the judgments of the Supreme Court in Union of India v. Rajeev Bansal and this Court in Ram Balram Buildhome Pvt. Ltd. v. Income Tax Officer & Anr., as well as previous judgments of this Court in T.K.S. Builders, Abhinav Jindal, and Naveen Kumar Gupta concerning sanction under Section 151 and the authority of the jurisdictional AO. The CIT(A) was instructed to pass a reasoned and speaking order addressing the impact of these judgments on the impugned reassessment notices, determining whether they would survive or be liable to be recalled. It would be open to the petitioner to assail any adverse orders passed by the CIT(A) in accordance with law. The Court disposed of the writ petition with these directions.

What were the facts?

The petitioner, VA Properties Private Limited, filed a writ petition challenging the reassessment action initiated by the Income Tax Officer, Ward 26 (1), New Delhi, for Assessment Year 2014-15. The primary contention revolved around the 'surviving period' for issuing the reassessment notice. The petitioner presented a chart arguing that the notice dated 25.07.2022 was time-barred, considering the original limitation period, extensions due to the Taxation and Other Laws (Relaxation of Certain Provisions) Act, 2020 (TOLA), and the period of deemed stay. During the pendency of the writ petition, an Assessment Order dated 31.05.2023 was passed, and an appeal was filed before the Commissioner of Income Tax (Appeals) (CIT(A)).

What were the issues?

1. Whether the reassessment notice issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2014-15 is barred by limitation, considering the interplay of Section 149, Section 151, the Taxation and Other Laws (Relaxation of Certain Provisions) Act, 2020 (TOLA), and the Supreme Court's ruling in Union of India v. Rajeev Bansal and this Court's ruling in Ram Balram Buildhome Pvt. Ltd. v. Income Tax Officer & Anr. Assessee's Contention: The assessee argued that the notice dated 25.07.2022 was issued beyond the extended period of limitation, citing a detailed calculation of the surviving period and relying on the Supreme Court judgment in Rajeev Bansal. Revenue's Contention: The judgment does not record specific arguments made by the revenue on the issue of limitation. However, the revenue was represented by counsel.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
$~27 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 1238/2023 VA PROPERTIES PRIVATE LIMITED .....Petitioner Through: Mr. Karanjot Singh Khurana, Mr. Dewang Singh, Advs. versus INCOME TAX OFFICER WARD 26 1 NEW DELHI & ANR. .....Respondent Through: Mr. Ruchir Bhatia, SSC with Mr. Anant Mann, Mr. Pratyursh Gupta, Mr. Aditi Sabharwal, 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‟] 2014-15. 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:- “S. No. Particulars Date SC Paras Annexure

1.

Assessment year 2014-15

2.

Period of limitation u/s 149 6 years

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 22:07:15

3.

Original period of limitation u/s 149 31.03.2021

4.

Extended period of limitation as per IT Act read with TOLA 30.06.2021 Para 65- 69

5.

Sanction to be obtained u/s 151 till 30.06.2021 (within 6 years) PCIT

Annexure P- 5 (page 79 of WP)

6.

Date of original notice u/s 148- Deemed SCN u/s 148A(b) 30.06.2021

Annexure P- 5 (page 79 of WP)

7.

Time surviving from date of issuance of deemed SCN till expiry of period extended by TOLA (i.e. 30.06.2021 to 30.06.2021) 1 day Para 109- 113

8.

Period of deemed stay to be excluded as per 3rd proviso to Section 149 (date of original 148 notice till date allowed to file reply) 30.06.2021 to 09.06.2022

Para 105- 107 Annexure- P1 (Page 35 of WP) (Notice issued on 26.05.2022 allowing time till 09.06.2022 to file reply)

9.

Last date for issuing notice u/s 148- 09.06.2022+1 day+7 days=17.06.2022 [As per sixth proviso to section 149, since period available (i.e. 1 day) is less than 7 days, 7 days added to compute period of limitation] 17.06.2022

10.

Actual date of issuance of notice u/s 148 25.07.2022

Annexure P- 3 (page 48 of WP) Applying SC judgment in Rajeev Bansal, notice issued u/s 148 is barred by limitation”

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 22:07:15

3.

We take note of the fact that an Assessment Order dated 31 May 2023 has been passed during the pendency of the present Writ Petition, and an appeal has been preferred before the Commissioner of Income Tax (Appeals) [„CIT(A)‟] challenging the same. The question of surviving period would then have to be necessarily examined by the CIT(A) 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 22:07:15

5.

Consequently, and in light of the above, we dispose of the writ petition, directing the CIT(A) to decide on the issue in terms of the directions 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 22:07:15

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