GAURI AGGARWAL vs. INCOME TAX OFFICER WARD 49(1), DELHI

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W.P.(C)/5918/2023HC DelhiDLHC01016996202303 March 2025Author: HON'BLE MR. JUSTICE HARISH VAIDYANATHAN SHANKAR,HON'BLE MR. JUSTICE YASHWANT VARMA4 pages
AI SummaryRemanded

What did the High Court hold?

The Delhi High Court disposed of the writ petition on terms identical to those provided in paragraphs 27 to 29 of its judgment in Kanwaljeet Kaur vs. Commissioner of Income Tax. The Court directed the concerned Assessing Officers (AOs) to evaluate the individual show-cause notices (SCNs) under Section 148 of the Income Tax Act, 1961, bearing in mind the judgments in T.K.S. Builders, Abhinav Jindal, and Naveen Kumar Gupta, which have settled issues pertaining to the accordal of sanction under Section 151 and the authority of the AO to commence reassessment. Furthermore, the AOs are to undertake an exercise to examine the issue of surviving period for each individual noticee under Section 148, guided by the judgments in Rajeev Bansal and Ram Balram Buildhome Pvt. Ltd. v. Income Tax Officer & Anr. The AOs shall consequently pass a reasoned and speaking order dealing with the impact of these judgments on the impugned reassessment notices, determining whether they would survive or be liable to be recalled. It will be open to the petitioner to assail any adverse orders passed pursuant to this direction. The court expressly left undecided the ultimate fate of the reassessment proceedings, deferring it to the AO's reasoned order.

What were the facts?

The petitioner, Gauri Aggarwal, filed a writ petition challenging the reassessment action initiated by the Income Tax Officer (ITO), Ward 49(1), Delhi, for Assessment Year 2014-15. The primary issue in dispute is whether the reassessment proceedings are barred by limitation. The petitioner provided a timeline of events, including the issuance of an old law notice under Section 148 on April 19, 2021, a notice under Section 148A(b) on May 25, 2022, a reply to the 148A(c) notice on June 9, 2022, and a notice under the new law and Section 148A(d) order on July 18, 2022. The petitioner argued that the reassessment is barred under Section 149(1)(b) as the amount in dispute is less than fifty lakhs (specifically Rs. 25 lacs). The petitioner also contended that the sanction under Section 151 was mechanical and lacked independent application of mind, citing various High Court and Supreme Court decisions.

What were the issues?

1. Whether the reassessment proceedings initiated for Assessment Year 2014-15 are barred by limitation under Section 149(1)(b) of the Income Tax Act, 1961, given that the amount in dispute is stated to be Rs. 25 lacs? 2. Whether the sanction granted by the specified authority under Section 151 of the Income Tax Act, 1961, for reopening the assessment was mechanical and lacked independent application of mind, thereby vitiating the reassessment proceedings? Assessee's Contentions: The petitioner argued that the reassessment is time-barred under Section 149(1)(b) as the amount in dispute is less than Rs. 50 lacs. The petitioner further contended that the sanction under Section 151 was a 'mechanical sanction' and a 'rubber stamp' approval, not reflecting an independent application of mind, citing decisions in Kanwaljeet Kaur v. Assistant Commissioner Of Income Tax Circle (34) & Ors., Union of India v. Rajeev Bansal, PCIT v. Pioneer Town Planners Pvt Ltd, SBC Minerals Pvt. Ltd vs ACIT, Vinod Kumar Solanki vs ACIT, Capital Broadways Pvt Ltd vs ITO, and Sanjay Kumar vs ACIT. Revenue's Contentions: The judgment does not record specific contentions made by the revenue. However, the court's direction implies that the revenue's action of issuing notices and obtaining sanction was subject to review.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A,Section 149,Section 151

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
$~45 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 5918/2023 GAURI AGGARWAL .....Petitioner Through: Dr. Kapil Goel and Mr. Sandeep Goel, Advs. versus INCOME TAX OFFICER WARD 49(1), DELHI .....Respondent Through: Mr. Siddhartha Sinha, SSC. CORAM: HON'BLE MR. JUSTICE YASHWANT VARMA HON'BLE MR. JUSTICE HARISH VAIDYANATHAN SHANKAR

O R D E R %

03.03.

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: WP (C) NO 5918/2023 2014-2015 OLD LAW/ INITIAL NOTICE U/S 148 19.04.2021 (ANNEXURE P-2 PAGE 54) 148A(B) NOTICE 25.05.2022 ANNEXURE P-3 PAGE 55 TO 57) 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 20:47:01

REPLY 148A(C) 09.06.2022 (ANNEXURE P-4 PAGE 58 TO 69) 148 NEW LAW NOTICE AND 148A(D) ORDER 18.07.2022 (ANNEXURE P-5 & P-6 PAGE 70 TO 75A & 76/77)) STATUS Covered by this hon'ble court decision in case of Kanwaljeet Kaur v. Assistant Commissioner Of Income Tax Circle (34) 1 Delhi & Ors 2025:DHC:656-DB (para 27 to para 29) LESS THAN 50 LACS *(CORRECT AMOUNT RS 25 LACS) BARRED U/S 149(1)(B) MECHANICAL SANCTION U/S 151 REFER WRIT PAGE 75/75A COMNINED SANCTION WITH RUBBER STAMP /PROFORMA APPROVAL: COVERED BY Hon'ble Apex court recent decision in case of UOI va Rajeev Bansal case (03rd oct 2024) Civil Appeal No 8629 of 2024 2024 INSC 754 (469 ITR 46) "In Chhugamal Rajpal v. S P Chaliha, a three-Judge Bench of this Court held that Section 151 must be strictly adhered to because it contains "important safeguards "iii. Sanction of the specified authority 73. Section 151 imposes a check upon the power of the Revenue to reopen assessments. The provision imposes a responsibility on the Revenue to ensure that it obtains the sanction of the specified authority before issuing a notice under Section 148. The purpose behind this procedural check is to save the assesses from harassment resulting from the mechanical reopening of assessments." & THIS HON'BLE COURT DECISIONS IN PLANNERS PVT LTD 465 ITR 356 & 7885/2023 (20.08.2024) ; VINOD KUMAR SOLANKI VS ACIT W.P.(C) 4196/2022 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 20:47:01

(14.08.2024) & Hon'ble Delhi high court in case of (03RD OCT 2024) HELD "

20.

As explained in the above cases, mere repeating of the words of the statute, mere rubber stamping of the letter seeking sanction or using similar words like "Yes, I am satisfied" will not satisfy the requirement of law. Hence, we are of the firm view that PCIT has failed to satisfactorily record his concurrence. The mere use of expression "Yes, I am satisfied" cannot be considered to be a valid approval as the same does not reflect an independent application of mind. The grant of approval in such manner is thus flawed in law." & Hon'ble Delhi high court decision in case 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 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 20:47:01

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.”

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 03, 2025/DR 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 20:47:01

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