JAINCO LTD vs. ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 31 DELHI & ORS.

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W.P.(C)/15379/2024HC DelhiDLHC01075830202404 November 2024Author: HON'BLE MR. JUSTICE VIBHU BAKHRU,HON'BLE DR. JUSTICE SWARANA KANTA SHARMA3 pages
AI SummaryPartly Allowed

What did the High Court hold?

The Delhi High Court allowed the present petition. The Court noted that the Revenue's counsel fairly stated that the challenge to the notices issued under Section 148A(b) and Section 148 of the Act was covered by the decision of the High Court in ARN Infrastructures India Ltd. v. Assistant Commissioner of Income Tax Cental Circle-28 Delhi & Ors. In view of this concession, the learned counsel for the petitioner confined the present petition to prayer (a), which sought to stay the operation of the impugned order and notice. Consequently, the High Court set aside the impugned notices. The Court did not explicitly decide on the challenge to the CBDT Instruction No. 1/2023, as the petition was disposed of based on the concession regarding the notices.

What were the facts?

The petitioner, Jainco Ltd., filed a writ petition before the Delhi High Court challenging an order dated 31.08.2024 passed by the Assistant Commissioner of Income Tax (Respondent No. 1) under Section 148A(d) of the Income Tax Act, 1961, and a notice dated 31.08.2024 issued under Section 148 of the Act. The petitioner also challenged CBDT Instruction No. 1/2023 dated 23.08.2023, to the extent it allowed issuance of notices under Section 147/148 in cases decided by appellate authorities, relying on the Supreme Court judgment in Pr. CIT (Central-3) v. Abhisar Buildwell Pvt. Ltd. The petitioner sought a stay on the impugned order and notice, and restraint on further proceedings. The Revenue's counsel conceded that the challenge to the Section 148A(b) and Section 148 notices was covered by a previous High Court decision.

What were the issues?

1. Whether the operation of the impugned order dated 31.08.2024 passed by Respondent No. 1 under section 148A(d) of the Act and notice dated 31.08.2024 issued by Respondent No. 1 under section 148 of the Act should be stayed till the disposal of the writ petition? (Mixed question of law and fact, concerning Sections 148A and 148 of the Income Tax Act, 1961). 2. Whether the Respondents should be restrained from continuing with proceedings pursuant to the impugned order and notice dated 31.08.2024 till the disposal of the writ petition? (Mixed question of law and fact, concerning Sections 148A and 148 of the Income Tax Act, 1961). 3. Whether CBDT Instruction No. 1/2023 dated 23.08.2023 is valid to the extent it provides for issuance of notices under Section 147/148 of the Act in respect of cases disposed of by appellate authorities by relying on the judgment of the Supreme Court in Pr. CIT (Central-3) v. Abhisar Buildwell Pvt. Ltd.? (Question of law, concerning Section 147/148 of the Income Tax Act, 1961 and administrative instructions). Assessee's Contentions: The petitioner sought a stay and restraint on proceedings based on the impugned order and notice. They also challenged the validity of the CBDT instruction regarding re-opening cases decided by appellate authorities. The petitioner relied on the Supreme Court judgment in Pr. CIT (Central-3) v. Abhisar Buildwell Pvt. Ltd. in their challenge to the CBDT instruction. Revenue's Contentions: The Revenue's counsel conceded that the challenge to the notices issued under Section 148A(b) and Section 148 of the Act was covered by the decision of the Delhi High Court in ARN Infrastructures India Ltd. v. Assistant Commissioner of Income Tax Cental Circle-28 Delhi & Ors. However, the Revenue submitted that the challenge to the CBDT's instruction required examination.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148,Section 147

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
$~57 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 15379/2024, CM APPL. 64461/2024 & CM APPL. 64462/2024 JAINCO LTD .....Petitioner Through: Mr. Ved Jain, Mr. Nischay Kantoor, Ms. Soniya Dodeja and Mr. Divyansh Dubey, Advocates versus ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 31 DELHI & ORS. .....Respondents Through: Mr. Shlok Chandra, SSC with Ms. Naincy Jain and Ms. Madhuri Shukla, Jr. SCs with Mr. Sushant Pandey, Advocate for Income Tax Deparment. Mr. Ashish Goyal, SPC with Mr. Sandeep Tyagi, Advocate for R-4. CORAM: HON'BLE MR. JUSTICE VIBHU BAKHRU HON'BLE MS. JUSTICE SWARANA KANTA SHARMA

O R D E R %

04.11.

2024

1.

Issue notice. The learned counsel appearing on behalf of respondents accepts notice.

2.

The petitioner has filed the present petition, inter alia, praying as under: “...a. Stay the operation of the impugned order dated 31.08.2024 passed by Respondent No. 1 under section 148A(d) of the Act and notice dated 31.08.2024 issued by Respondent 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 11/11/2024 at 11:59:29

No. 1 under section 148 of the Act till the disposal of this writ petition; and b. Restraint the Respondents from continuing with the proceedings, in any manner, pursuant to impugned order and notice dated 31.08.2024, till the disposal of the present writ petition. c. grant ad-interim ex-parte relief in terms of prayer (a) and (b) above; and d. pass such further or other order/direction as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case...”

3.

In addition to the aforementioned prayers, the petitioner also impugns Instruction No. 1/2023 dated 23.08.2023 issued by the Central Board of Direct Taxes (CBDT) to the extent that it provides for issuance of notices under Section 147/148 of the Act in respect of cases disposed of by the appellate authorities by relying on the judgment of the Supreme Court in Pr. CIT (Central-3) v. Abhisar Buildwell Pvt. Ltd.: [2023] 149 taxmann.com 399 (SC).

4.

The learned counsel appearing for the Revenue fairly states that insofar as the challenge to the notices issued under Section 148A(b) and Section 148 of the Act are concerned, the said issue is covered by the decision of this Court in ARN Infrastructures India Ltd. v. Assistant Commissioner of Income Tax Cental Circle-28 Delhi & Ors.: Neutral Citation No.:2024:DHC:7423-DB. He, however, submits that the challenge to the CBDT’s instruction (Instruction No. 1/2023) requires examination.

5.

In view of the above, the learned counsel appearing for the petitioner submits that he will confine the present petition to prayer (a) as set out above.

6.

In view of the same, the present petition is allowed and the impugned notices are set aside. 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 11/11/2024 at 11:59:29

7.

Accordingly, the present petition is disposed of.

VIBHU BAKHRU, J

SWARANA KANTA SHARMA, J NOVEMBER 4, 2024 zp

Click here to check corrigendum, if any 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 11/11/2024 at 11:59:29

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