AJAY MITTAL vs. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 52 (1) DELHI

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W.P.(C)/2841/2023HC DelhiDLHC01007604202304 February 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 these writ petitions in light of its previous judgment in Kanwaljeet Kaur v. Assistant Commissioner Of Income Tax Circle (34) 1 Delhi & Ors. In that judgment, the Court had directed the 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. These decisions settled issues concerning the sanction under Section 151 and the authority of the jurisdictional AO. The Court also noted that the AO must examine the surviving period of each notice under Section 148, guided by the judgments in Rajeev Bansal and Ram Balram. Consequently, the AOs were directed to pass reasoned orders determining whether the reassessment notices would survive or be recalled, based on the impact of the cited judgments. The petitioners were granted liberty to assail any adverse orders.

What were the facts?

These four writ petitions (W.P.(C) 2841/2023, W.P.(C) 3322/2023, W.P.(C) 3580/2023, and W.P.(C) 3679/2023) were filed before the Delhi High Court. The petitioners, Ajay Mittal, Uttranchal Ispat Private Limited, Real Fincap Ltd., and Roop Diamond House Private Limited, challenged reassessment actions initiated by the Income Tax Department for Assessment Year 2015-16. The reassessment notices were issued after April 1, 2021. The Department's actions were taken in light of the Supreme Court's judgment in Union of India & Ors. v. Ashish Agarwal. The High Court had previously dealt with similar matters in Kanwaljeet Kaur v. Assistant Commissioner Of Income Tax Circle (34) 1 Delhi & Ors.

What were the issues?

1. Whether the reassessment notices issued under Section 148 of the Income Tax Act, 1961, for AY 2015-16, which were issued post-April 1, 2021, are valid, considering the Supreme Court's decision in Union of India & Ors. v. Ashish Agarwal and subsequent High Court judgments (T.K.S. Builders, Abhinav Jindal, Naveen Kumar Gupta, Rajeev Bansal, and Ram Balram)? Assessee's Contention (Implicit): The reassessment notices are liable to be quashed or recalled due to procedural infirmities or being beyond the permissible period, as per the precedents set by the Supreme Court and High Court. Revenue's Contention (Implicit): The reassessment actions are valid and have been undertaken in accordance with the law, particularly after the clarification provided by the Supreme Court in Ashish Agarwal, and the subsequent judgments have guided the procedure for such notices.

Which sections of the Income-tax Act were involved?

Section 148,Section 151,Section 153C

AI-generated summary — verify with the full judgment below

Heard together (4 matters)

W.P.(C) 2841/2023
W.P.(C) 3322/2023
W.P.(C) 3580/2023
W.P.(C) 3679/2023

Read from the judgment's own cause title. This page is filed under one of them.

Cause title — parties, addresses and appearances
$~32 to 35 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 2841/2023 & CM APPL. 10953/2023 (Stay) AJAY MITTAL .....Petitioner Through: Dr. Kapil Goel & Mr. Sandeep Goel, Advs. versus ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 52 (1) DELHI .....Respondent Through: Mr. Indruj Singh Rai, SSC with Mr. Sanjeev Menon, Mr. Rahul Singh, JSCs, Mr. Anmol Jagga & Mr. Gaurav Kumar, Advs. 33 + W.P.(C) 3322/2023 & CM APPL. 12892/2023 (Interim Relief) UTTRANCHAL ISPAT PRIVATE LIMITED .....Petitioner Through: Ms. Smriti Sahay, Mr. M. Goswami & Ms. Pragati Singh, Advs. versus UNION OF INDIA & ORS. .....Respondents Through: Mr. Puneet Rai, SSC with Mr. Ashvini Kr. & Mr. Rishabh Nangia, JSCs. 34 + W.P.(C) 3580/2023 REAL FINCAP LTD. .....Petitioner Through: Dr. Kapil Goel & Mr. Sandeep Goel, Advs. versus INCOME TAX OFFICER WARD 21 (1) NEW DELHI .....Respondent Through: Appearance not given. 35 + W.P.(C) 3679/2023 & CM APPL. 14253/2023 (Interim Relief) ROOP DIAMOND HOUSE PRIVATE LIMITED .....Petitioner

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 23:02:11

Through: Mr. Atit Jain, Adv.

versus

INCOME TAX OFFICER WARD 21-1 DELHI & ANR. .....Respondents Through: Mr. Puneet Rai, SSC with Mr. Ashvini Kr. & Mr. Rishabh Nangia, JSCs.

CORAM:

HON'BLE MR. JUSTICE YASHWANT VARMA HON'BLE MR. JUSTICE HARISH VAIDYANATHAN SHANKAR

O R D E R %

04.02.

2025

1.

These writ petitions had questioned the reassessment actions pertaining to Assessment Year [“AY”] 2015-16 which came to be initiated in terms of the notices impugned.

2.

The notices were issued post 01 April 2021 and whereafter the respondents adopted a course correction in light of the judgment rendered by the Supreme Court in Union of India & Ors. v. Ashish Agarwal1. 3. We have, while disposing of a batch of writ petitions in Kanwaljeet Kaur v. Assistant Commissioner Of Income Tax Circle (34) 1 Delhi & Ors.2, wherein we had an occasion to examine the fall out of the judgment in Ashish Agarwal as explained in Union of India v. Rajeev Bansal 3, ultimately, remitted all matters for the consideration of the Assessing Officer in the following terms: “27.We accordingly dispose of this batch of writ petitions by directing the concerned AOs to evaluate the individual SCNs‟

1 (2023) 1 SCC 617 2 2025:DHC:656-DB 3 2024 SCC OnLine SC 2693 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 23:02:11

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.”

4.

We, consequently, dispose of these writ petitions in light of paras 27 to 29 in Kanwaljeet Kaur.

YASHWANT VARMA, J.

HARISH VAIDYANATHAN SHANKAR, J. FEBRUARY 4, 2025/v

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 23:02:11

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