RKG BUILDWELL PRIVATE LIMITED vs. PRINCIPAL COMMISSIONER INCOME TAX DELHI 7, & ANR.

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W.P.(C)/15354/2024HC DelhiDLHC01075805202404 November 2024Bench: HON'BLE MR. JUSTICE VIBHU BAKHRU,HON'BLE DR. JUSTICE SWARANA KANTA SHARMA3 pages
AI SummaryDismissed

What did the High Court hold?

The Delhi High Court dismissed the writ petition. On the first issue, the Court held that the issuance of the notice on the same day as the approval does not, by itself, establish that the approval was granted without application of mind. Regarding the second issue, the Court noted that the assessee had not yet filed its return of income pursuant to the impugned notice. The Court stated that the assessee is required to file the return first, and thereafter, the AO is obligated to furnish the relevant information. The third issue concerning the jurisdiction of the Assessing Officer to issue the notice under Section 148 in view of Section 151A of the Act was decided against the assessee, with the Court holding that this issue is covered by the decision in TKS Builders Pvt. Ltd. v. Income Tax Officer Ward 25(3) New Delhi [2024] 167 taxman.com 759 (Delhi). The Court found no merit in the assessee's contentions and accordingly dismissed the petition.

What were the facts?

The assessee, RKG Buildwell Private Limited, filed a writ petition before the Delhi High Court challenging a notice dated March 22, 2024, issued under Section 148 of the Income Tax Act, 1961. The assessee argued that the Principal Commissioner of Income Tax granted approval for the notice on the same day it was issued, suggesting a mechanical approval without application of mind. Additionally, the assessee contended that the notice was based on information from a search in the 'Galaxy Group' and that the Assessing Officer (AO) failed to provide this information despite repeated requests. The assessee also raised a jurisdictional issue concerning Section 151A of the Act. The revenue, represented by the Principal Commissioner Income Tax Delhi 7 and another, contested these grounds.

What were the issues?

1. Whether the approval granted by the Principal Commissioner of Income Tax for the Section 148 notice on the same day of its issuance indicates a lack of application of mind, rendering the notice invalid? (Question of fact and law) 2. Whether the Assessing Officer's failure to provide the information forming the basis of the Section 148 notice, which originated from a search in the 'Galaxy Group', vitiates the notice, especially when the assessee requested it? (Question of fact and law) 3. Whether the Assessing Officer lacked jurisdiction to issue the Section 148 notice in light of Section 151A of the Act and a notification dated March 29, 2022? (Question of law) Assessee's Contentions: - The approval was mechanical and without application of mind as it was granted on the same day as the notice issuance. - The AO failed to provide the information from the 'Galaxy Group' search, which was the basis for the notice, despite repeated requests. - The AO lacked jurisdiction to issue the notice under Section 148 due to Section 151A of the Act. Revenue's Contentions: - The revenue did not explicitly record its contentions on the first two grounds in the judgment. However, it implicitly defended the notice's validity. - Regarding the jurisdictional issue, the revenue relied on the decision in TKS Builders Pvt. Ltd. v. Income Tax Officer Ward 25(3) New Delhi [2024] 167 taxman.com 759 (Delhi).

Which sections of the Income-tax Act were involved?

Section 148,Section 151A,Section 132

AI-generated summary — verify with the full judgment below

$~55 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 15354/2024 & CM APPL. 64398/2024

RKG BUILDWELL PRIVATE LIMITED .....Petitioner Through: Mr. V.K. Sabharwal and Mr. R.B. Gupta, Advocates

versus

PRINCIPAL COMMISSIONER INCOME TAX DELHI 7 & ANR.

.....Respondents

Through: Mr. Sunil Agarwal, Sr. Standing Counsel with Mr. Shivansh B. Pandya and Mr. Viplav Acharya, Jr. Standing Counsels with Mr. Utkarsh Tiwari, Advocate for Income Tax Department.

CORAM:

HON'BLE MR. JUSTICE VIBHU BAKHRU

HON'BLE MS. JUSTICE SWARANA KANTA SHARMA

O R D E R %

04.11.2024 CM APPL. 64399/2024 (exemption) 1. Exemption is allowed, subject to all just exceptions. 2. Application stands disposed of. W.P.(C) 15354/2024 3. The assessee has filed the present petition under Article 226 of the Constitution of India impugning a notice dated 22.03.2024 issued under Section 148 of the Income Tax Act, 1961 (hereafter the Act). 4. The learned counsel for the petitioner/assessee submits that the impugned notice is required to be set aside on essentially three grounds. First, 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 11:59:13

he submits that the Principal Commissioner of Income Tax had granted approval of the said notice on the very same day of the issuance of notice. He submits that this is indicative of the fact that such approval was granted mechanically and without application of mind. Second, he submits that the impugned notice is premised on the basis that certain information was available with the Assessing Officer (hereafter the AO) pursuant to a search conducted under Section 132 of the Act in a group of entities described as Galaxy Group. He submits that the said group comprised of various entities and, therefore, it is necessary for the AO to have shared the information on which the impugned notice was predicated. The petitioner/assessee had made repeated requests to the AO for furnishing the said information but the same has not been provided yet. Third, he submits that the AO does not have any jurisdiction to issue the notice in view of Section 151A of the Act. 5. None of the aforesaid contentions are persuasive. The fact that the impugned notice was issued on the same day does not establish that the approval was granted without application of mind. 6. Insofar as the information sought by the petitioner is concerned, the petitioner is required to file his return of income pursuant to the impugned notice, and the AO is required to furnish him the information thereafter. 7. Admittedly, the petitioner has not filed his return of income as yet. 8. The question whether the Jurisdictional Assessing Officer (JAO) lacked the jurisdiction to issue a notice under Section 148 of the Act in view of notification dated 29.03.2022 read with Section 151A of the Act, is covered against the petitioner/assessee by the decision of the Coordinate Bench of this Court in TKS Builders Pvt. Ltd. v. Income Tax Officer Ward 25(3) New Delhi [2024] 167 taxman.com 759 (Delhi). 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 11:59:13

9.

In view of the above, the petition is unmeritted. Accordingly, the present petition along with pending application is dismissed.

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 11:59:13

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