AJAY SINGHANIA vs. INCOME TAX OFFICER WARD 23(3), DELHI

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W.P.(C)/6052/2023HC DelhiDLHC01017375202303 March 2025Author: HON'BLE MR. JUSTICE HARISH VAIDYANATHAN SHANKAR,HON'BLE MR. JUSTICE YASHWANT VARMA3 pages
AI SummaryRemanded

What did the High Court hold?

The Delhi High Court disposed of the writ petition by directing the Jurisdictional Assessing Officer (AO) to evaluate the individual show-cause notices (SCNs) under Section 148A of the Income Tax Act, 1961. The AO is to consider the impact of the judgments in T.K.S. Builders, Abhinav Jindal, and Naveen Kumar Gupta, which have settled issues concerning the accordal of sanction under Section 151 and the authority of the AO to commence reassessment. Furthermore, the AO must examine the issue of the 'surviving period' for each noticee under Section 148, guided by the Supreme Court's decision in Union of India v. Rajeev Bansal and this Court's ruling in Ram Balram Buildhome Pvt. Ltd. v. Income Tax Officer & Anr. The AO is to pass a reasoned and speaking order addressing the impact of these judgments on the impugned reassessment notices, determining whether they should survive or be recalled. The petitioner is at liberty to challenge any adverse order passed subsequently. The Court explicitly left undecided the ultimate fate of the reassessment notices, deferring this to the AO's evaluation.

What were the facts?

The petitioner, Ajay Singhania, filed a writ petition challenging the reassessment action initiated by the Income Tax Officer, Ward 23(3), Delhi, for Assessment Year 2013-14. The primary contention of the petitioner is that the reassessment proceedings are time-barred. The petitioner provided a chart detailing the timeline of notices and orders, including an initial notice under Section 148 dated 06.04.2021, a notice under Section 148A(b) dated 25.05.2022, a reply under Section 148A(c) dated 06.06.2022, and the final order under Section 148A(d) dated 28.07.2022. The petitioner also highlighted a variation between the show-cause notice under Section 148A(b) and the final order under Section 148A(d).

What were the issues?

1. Whether the reassessment proceedings initiated by the respondent for Assessment Year 2013-14 are barred by limitation, considering the timeline of notices and orders issued under Sections 148 and 148A of the Income Tax Act, 1961. Assessee's Contentions: The petitioner argued that the reassessment proceedings are time-barred. They relied on the chart detailing the dates of notices and orders, emphasizing the variation between the show-cause notice under Section 148A(b) and the final order under Section 148A(d). They cited the decision in ATS Infrastructure Ltd. vs ACIT 2024 SCC OnLine Del 5048 and subsequent cases applying it, such as Harvinder Singh vs PCIT, Subhash Chander Dabas vs ACIT, and Jindal Saw Ltd Vs ACIT, to support the claim that the proceedings are invalid due to procedural infirmities and time limitations. Revenue's Contentions: The revenue, through its counsel, referred to paragraph 11 of its counter affidavit, which acknowledged the admitted and undisputed variation between the SCN under Section 148A(b) and the final order under Section 148A(d). The revenue did not present separate arguments but implicitly accepted the need for examination in light of existing judicial pronouncements.

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
$~46 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 6052/2023 & CM APPL. 23688/2023 (Stay) AJAY SINGHANIA .....Petitioner Through: Dr. Kapil Goel and Mr. Sandeep Goel, Advs. versus INCOME TAX OFFICER WARD 23(3), DELHI .....Respondent Through: Mr. Puneet Rai, SSC with Mr. Ashvini Kr. and Mr. Rishabh Nangia, JSCs for Income Tax Department. 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 6052/2023 2013-2014 FIRST INTERIM/ RELEVANT ORDER 10.05.2023 (VARIATION BETWEEN 148A(B) AND FINAL ORDER 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

148A(D) AND CBDT INSTRUCTION 1/2011) OLD LAW/ INITIAL NOTICE U/S 148 06.04.2021 (ANNEXURE P-2 PAGE 55) 148A(B) NOTICE 25.05.2022 (ANNEXURE P-3 PAGE 56 & 57) REPLY 148A(C) 06.06.2022 (ANNEXURE P-4 PAGE 58 TO 73) 148 NEW LAW NOTICE AND 148A(D) ORDER 28.07.2022 (ANNEXURE P-5 & P-6 PAGE 74 TO 79 & 80/81) STATUS On admitted and undisputed Variation between SCN u/s 148A(b) AND final order u/s 148A(d) REFER REVENUE COUNTER PARA 11 – covered by this hon’ble court series of decisions leading 7322/2023 12.02.2025 B) SUBHASH CHANDER DABAS vs ACIT (05.12.2024) W.P.(C) 12784/2019 17851/2024. Order dated 23.12.2024 “We bear in mind the well-settled position that the reasons for the formation of opinion cannot be of changing hues”

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.

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

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.”

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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