VSS PACKAGING PRIVATE LIMITED vs. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 25(1), DELHI & ORS.

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W.P.(C)/7935/2023HC DelhiDLHC01022493202304 March 2025Author: HON'BLE MR. JUSTICE YASHWANT VARMA,HON'BLE MR. JUSTICE HARISH VAIDYANATHAN SHANKAR2 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 Paras 27 to 29 of its judgment in Kanwaljeet Kaur vs. Commissioner of Income Tax. Consequently, the concerned Assessing Officers (AOs) are directed to evaluate the individual show-cause notices (SCNs) under Section 148 of the Act. This evaluation must consider the High Court's judgments in T.K.S. Builders, Abhinav Jindal, and Naveen Kumar Gupta, which have settled issues regarding sanction under Section 151 and the jurisdictional AO's authority for reassessment, including the applicability of Section 153C in search cases. Furthermore, a similar exercise must be undertaken to examine the 'surviving period' of each notice under Section 148, guided by the Supreme Court's judgment in Rajeev Bansal and the High Court's judgment in Ram Balram. The AOs shall pass reasoned and speaking orders addressing the impact of these judgments on the impugned reassessment notices, determining whether they would survive or be recalled. Petitioners are at liberty to challenge any adverse orders.

What were the facts?

The petitioner, VSS Packaging Private Limited, filed a writ petition before the Delhi High Court challenging reassessment notices issued under Section 148 of the Income Tax Act, 1961. The primary issue for consideration was the 'surviving period' of these notices, to be decided in light of Supreme Court and Delhi High Court judgments. The High Court had previously disposed of a batch of similar writ petitions in the case of Kanwaljeet Kaur vs. Commissioner of Income Tax, providing specific operative directions for the Assessing Officers (AOs) to re-evaluate the reassessment notices.

What were the issues?

1. Whether the reassessment notices issued under Section 148 of the Income Tax Act, 1961, are valid in light of the judgments in T.K.S. Builders, Abhinav Jindal, and Naveen Kumar Gupta, concerning the accordal of sanction under Section 151 and the authority of the jurisdictional AO to commence reassessment, and whether an AO is bound to adhere to Section 153C in search cases? - Assessee's contention: Not explicitly recorded, but the challenge implies the notices are invalid. - Revenue's contention: Not explicitly recorded, but the issuance of notices implies their validity. 2. Whether the 'surviving period' of the reassessment notices under Section 148 of the Income Tax Act, 1961, is valid, guided by the judgments in Union of India v. Rajeev Bansal and Ram Balram Buildhome Pvt. Ltd. v. Income Tax Officer & Anr.? - Assessee's contention: Not explicitly recorded, but the challenge implies the notices have expired or are otherwise invalid. - Revenue's contention: Not explicitly recorded, but the issuance of notices implies they are within the valid period.

Which sections of the Income-tax Act were involved?

Section 148,Section 151,Section 153C

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
$~39 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 7935/2023, CM APPL. 30591/2023-(Stay) VSS PACKAGING PRIVATE LIMITED .....Petitioner Through: Mr. Rajeev Ahuja, Adv. versus ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 25(1), DELHI & ORS. .....Respondent Through: Mr. Sunil Agarwal, SSC with Mr. Shivansh B. Pandya, Mr. Viplav Acharya, Ms. Priya Sarkar, JSCs and Mr. Utkarsh Tiwari, Adv. for IT Department. CORAM: HON'BLE MR. JUSTICE YASHWANT VARMA HON'BLE MR. JUSTICE HARISH VAIDYANATHAN SHANKAR

O R D E R %

04.03.

2025

1.

We had, on the last occasion, noted that the solitary issue which would merit further consideration was the issue of surviving period and which was liable to be decided in light of the judgment of the Supreme Court in Union of India v. Rajeev Bansal [2024 SCC OnLine SC 2693].

2.

We had while examining the impact of the aforesaid judgment of the Supreme Court as well as that of our Court in Ram Balram Buildhome Pvt. Ltd. v. Income Tax Officer & Anr. [2025 SCC OnLine Del 481], while disposing of a batch of writ petitions by our Income Tax [2025 SCC OnLine Del 605] framed the following 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 19:06:05

operative directions: - “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.”

3.

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

YASHWANT VARMA, J

HARISH VAIDYANATHAN SHANKAR, J MARCH 04, 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 19:06:05

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