B.C.ENTERPRISES vs. INCOME TAX OFFICER WARD 58(3)

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W.P.(C)/6264/2023HC DelhiDLHC01017993202303 March 2025Author: HON'BLE MR. JUSTICE YASHWANT VARMA,HON'BLE MR. JUSTICE HARISH VAIDYANATHAN SHANKAR3 pages
AI SummaryRemanded

What did the High Court hold?

The Delhi High Court disposed of the writ petition on terms identical to its previous judgment in Kanwaljeet Kaur vs. Commissioner of Income Tax. The Court directed the Assessing Officer (AO) to evaluate the individual show cause notices (SCNs) under Section 148 of the Income Tax Act, bearing in mind the judgments in T.K.S. Builders, Abhinav Jindal, and Naveen Kumar Gupta. These judgments settled issues concerning the accordal of sanction under Section 151 and the authority of the jurisdictional AO to commence reassessment, including the procedure under Section 153C in search cases. Furthermore, the AO must examine the issue of the 'surviving period' for each noticee under Section 148, guided by the judgments in Rajeev Bansal and Ram Balram Buildhome Pvt. Ltd. The AO is 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 recalled. Any adverse orders can be assailed by the petitioner in accordance with law. The Court expressly left undecided the specific findings on the validity of the notices and the reassessment proceedings, deferring this to the AO's evaluation.

What were the facts?

The petitioner, B.C. Enterprises, filed a writ petition challenging the reassessment action initiated by the Income Tax Officer (ITO), Ward 58(3), New Delhi, for Assessment Year 2013-14. The primary contention of the petitioner revolves around the 'surviving period' of the reassessment proceedings. The petitioner provided a chart detailing the timeline of notices and orders, including an old law notice under Section 148 dated 07.04.2021, a notice under Section 148A(b) dated 14.05.2022, a reply under Section 148A(c) dated 15.06.2022, and notices/orders under Section 148A(d) dated 25 & 26.07.2022. The petitioner argued that the notice dated 05.07.2022 was invalid as it was issued outside the time limit specified by the Supreme Court in Ashish Aggarwal and CBDT Instruction 1/2022. The petitioner also raised issues of a vague charge in the show cause notice and order, non-supply of relied-upon material, and DIN aspect/sanction non-supply.

What were the issues?

1. Whether the reassessment proceedings initiated by the respondent for Assessment Year 2013-14 are time-barred, specifically concerning the validity of the notice issued under Section 148A(b) dated 05.07.2022, in light of the Supreme Court's decision in Ashish Aggarwal and CBDT Instruction 1/2022. 2. Whether the show cause notice (SCN) and the consequent order under Section 148A(d) suffered from a vague charge and non-supply of relied-upon material. 3. Whether there were issues related to the DIN aspect and non-supply of sanction. Assessee's Contentions: The petitioner argued that the reassessment proceedings were time-barred due to the invalidity of the notice dated 05.07.2022, which was issued beyond the time limit prescribed by Ashish Aggarwal and CBDT Instruction 1/2022. They also contended that the SCN and the order under Section 148A(d) were vitiated by a vague charge and the failure to provide material relied upon. Further, issues concerning the DIN aspect and the sanction were raised. Revenue's Contentions: The judgment does not record specific contentions from the revenue. However, the revenue was represented by Standing Counsel and Junior Standing Counsel.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
$~47 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 6264/2023 B.C.ENTERPRISES .....Petitioner Through: Dr. Kapil Goel and Mr. Sandeep Goel, Advs. versus INCOME TAX OFFICER WARD 58(3) .....Respondent Through: Mr. Abhishek Maratha, SSC with Mr. Apoorv Agarwal, Mr. Parth Samwal, JSCs with Ms. Nupur Sharma, Mr. Gaurav Singh, Mr. Bhanukaran Singh Jodha, Ms. Muskaan Goel and Mr. Himanshu Gaur, Advs. 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‟] 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: WP (C) NO 6264/2023 item 47 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 20:47:02

58(3)NEW DELHI ASST YEAR 2013-2014 FIRST INTERIM/ RELEVANT ORDER 15.05.2023 *VAGUE CHARGE IN SCN AND ORDER OLD LAW/ INITIAL NOTICE U/S 148 07.04.2021 (ANNEXURE P-2 PAGE 68) 148A(B) NOTICE 14.05.2022 05.07.2022 (INVALID OUTSIDE TIME LIMIT SET OUT IN SC ASHISH AGGARWAL AND CBDT INSTRUCTION 1/2022 DATED 11.05.2022) ANNEXURE P-3 PAGE 69 TO 76) REPLY 148A(C) 15.06.2022 (ANNEXURE P-4 PAGE 77 TO 78) 148 NEW LAW NOTICE AND 148A(D) ORDER 25 & 26.07.2022 (ANNEXURE P-5 & P-6 PAGE 79 TO 82 & 83-84)) 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) 148A(B) DATED 05.07.2022 INVALID AS PER CBDT INSTRUCTION 1/2022 PARA

8.

1 OUTER DATE 02 JUNE 2022 Vague Charge in SCN/Order and no relied upon material supplied ALSO DIN ASPECT INVOLVED AND SANCTION NON SUPPLY ISSUE

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 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 20:47:02

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.”

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 20:47:02

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