KANODIA TECHNOPLAST LTD vs. DCIT, CEN CIR 19, DELHI

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W.P.(C)/3050/2025HC DelhiDLHC01012672202508 September 2025Bench: HON'BLE MR. JUSTICE V. KAMESWAR RAO,HON'BLE MR. JUSTICE VINOD KUMAR4 pages
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What did the High Court hold?

The Delhi High Court held that the notice dated 28.08.2024, issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2017-18, was liable to be set aside. The Court reasoned that the reassessment proceedings were initiated beyond the statutory period of three years from the end of the relevant assessment year. Furthermore, the Court noted that the revenue, in its communication, accepted the assessee's contention that certain entries pertained to different assessment years and that there was a duplication of an invoice. This correction, as acknowledged by the revenue, reduced the amount of escaped assessment to below Rs. 50 lakhs. Consequently, the notice and any subsequent proceedings initiated based on it were ordered to be set aside. The petition was disposed of accordingly.

What were the facts?

The petitioner, Kanodia Technoplast Ltd., filed a writ petition before the Delhi High Court challenging a notice dated 28.08.2024 issued under Section 148 of the Income Tax Act, 1961. The notice pertained to Assessment Year 2017-18. The petitioner argued that the reassessment proceedings were initiated beyond the statutory period of three years and that the alleged escaped income was less than Rs. 50 lakhs. The petitioner also contended that certain entries in the computation provided by the revenue pertained to different assessment years or were duplicates, thus reducing the escapement amount below the threshold. The revenue, through its counsel, acknowledged the petitioner's contentions.

What were the issues?

1. Whether the notice issued under Section 148 of the Income Tax Act, 1961, dated 28.08.2024, for Assessment Year 2017-18, is liable to be quashed as being beyond the period of three years from the end of the relevant assessment year. 2. Whether the notice issued under Section 148 of the Income Tax Act, 1961, is liable to be quashed on the ground that the amount alleged to have escaped assessment is less than Rs. 50 lakhs, considering the petitioner's submissions regarding incorrect entries and duplications. Assessee's Contention: The notice is bad in law as it is issued beyond three years and the escaped income is below Rs. 50 lakhs. The petitioner highlighted that certain entries in the revenue's computation were for different assessment years and that there was a duplication of an invoice, which, if corrected, would reduce the escaped amount below Rs. 50 lakhs. Revenue's Contention: The revenue, through an email, conceded that the assessee's claim regarding the incorrect assessment year entries and the duplication of an invoice was correct, thereby reducing the total amount below Rs. 50 lakhs.

Which sections of the Income-tax Act were involved?

Section 148,Section 149(1)(b)

AI-generated summary — verify with the full judgment below

W.P.(C) 3050/2025 Page 1 of 4 $~80 * IN THE HIGH COURT OF DELHI AT NEW DELHI % Date of Decision: 08.09.2025 + W.P.(C) 3050/2025 & CM APPL. 14461/2025 KANODIA TECHNOPLAST LTD .....Petitioner Through: Ms. Rano Jain and Mr. Venketesh Chaurasia, Advs. versus DCIT, CEN CIR 19, DELHI .....Respondent Through: Mr. Vipul Aggarwal, SSC, Mr. Akshat Singh, JSC, Ms. Sakshi Shairwal, JSC, Mr. Gaoraang Ranjan and Ms. Harshita Kotru, Advs. CORAM: HON'BLE MR. JUSTICE V. KAMESWAR RAO HON'BLE MR. JUSTICE VINOD KUMAR V. KAMESWAR RAO, J. (ORAL) 1. This petition has been filed with the following prayers: “a. a writ in the nature of certiorari/ mandamus or any other appropriate writ, order or direction quashing the Notice issued dated 28.08.2024 under section 148 of the Act. b. a writ in the nature of mandamus, or any other appropriate writ, order or direction, holding that the notice issued by the respondent is untrue and incorrect in its fact. c. Cost of present proceedings may also be awarded in favour of the Petitioner and against the Respondents d. Pass any other or further order(s) as this Hon'ble Court may deem fit and proper on the facts and the circumstances of the Signed By:PRADEEP SHARMA Signing Date:15.09.2025 11:07:08 Signature Not Verified

W.P.(C) 3050/2025 Page 2 of 4 case.” 2. The present writ petition pertains to the Assessment Year (AY) 2017- 18. The submission of the learned counsel for the petitioner is that the impugned notice having been issued under Section 148 of the Income Tax Act, 1961 (the Act) on 28.08.2024, the assessment proceedings are beyond the period of three years and also since the amount alleged to have escaped assessment is less than Rs.50 lakhs, the prayers are liable to be granted. The computation (part of Annexure-A of the petition) as relied upon by the counsel for the petitioner is reproduced as under: “….. Signed By:PRADEEP SHARMA Signing Date:15.09.2025 11:07:08 Signature Not Verified

W.P.(C) 3050/2025 Page 3 of 4 3. On analysis of the document, it appears that sales had been made amounting to more than Rs. 52,76,010/- (for AY: 2017-18) have been made, which appears to have escaped assessment. In this regard, it is to be noted, that such information appears to be "an entry or entries in the books of accounts" within the definition enumerated in section 149(1)(b) of IT Act, 1961. xxxx xxxx xxxx” It is stated by the counsel for the petitioner that the amounts at serial nos. 3 and 4, pertains to a different assessment years. They need to be Signed By:PRADEEP SHARMA Signing Date:15.09.2025 11:07:08 Signature Not Verified

W.P.(C) 3050/2025 Page 4 of 4 excluded for computation. Similarly there is a duplication of the amount at serial no. 10 and 15, and only one figure has to be taken into consideration. 3. Mr. Vipul Aggarwal, learned SSC has placed before us an E-mail dated 14.07.2025 received by him which we reproduce as under: “….In this regard, please note that the information has been re-examined in the light of the contention of the assessee. The claim of the assessee with respect to the information containing 2 invoices pertaining to another AY and duplication of an invoice in the information shared and thereby, reducing the total amount below Rs. 50 Lakhs, is found to be correct.” From the above, it is clear that the reassessment being beyond three years from the end of the relevant assessment year and also, as the amount that escaped assessment is less then Rs.50 lakhs, the notice dated 28.08.2024 is liable to be set aside. We order accordingly. Any subsequent proceedings initiated shall also be set aside. 4. The petition is disposed of and pending application is dismissed as infructous. V. KAMESWAR RAO, J VINOD KUMAR, J SEPTEMBER 8, 2025 rk Signed By:PRADEEP SHARMA Signing Date:15.09.2025 11:07:08 Signature Not Verified

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