ERNST AND YOUNG EMEIA SERVICES LIMITED vs. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE INTERNATIONAL TAXATION 1 2 2 DELHI
What did the High Court hold?
The Delhi High Court held that it was not appropriate to entertain the writ petitions at the stage of a show cause notice issued under Section 148A(1) of the Income Tax Act, 1961. The court reasoned that the notice was procedural in nature, requiring the petitioner to respond. However, the court provided a crucial clarification: if the petitioners responded to the notice within one week from the date of the order, the Assessing Officer was directed to consider their response along with the previous decisions of the High Court on the matter before passing an appropriate order. The petitions were dismissed, but all rights and contentions of the parties were reserved. The court did not decide on the merits of the underlying tax issue.
What were the facts?
The petitioners, Ernst and Young U.S. LLP and Ernst and Young EMEIA Services Limited, filed writ petitions before the Delhi High Court. These petitions challenged a notice dated March 30, 2025, issued under Section 148A(1) of the Income Tax Act, 1961, for the assessment year 2019-20. The petitioners contended that the grounds for this notice were identical to those previously examined by the same court in earlier writ petitions involving the same parties. The respondent was the Assistant Commissioner of Income Tax, Circle International Taxation 1(2)(2), Delhi. The court was presented with the impugned notice and the procedural history leading to its issuance.
What were the issues?
1. Whether the High Court should entertain writ petitions challenging a notice issued under Section 148A(1) of the Income Tax Act, 1961, which is in the nature of a show cause notice. Assessee's Contentions: The petitioners argued that the impugned notice under Section 148A(1) was based on the same reasons that had already been examined by the High Court in previous writ petitions. They likely implied that issuing a fresh notice on identical grounds was improper or vexatious, and that the court should intervene at this stage. Revenue's Contentions: The judgment does not record any specific contentions made by the revenue. However, the court's decision to dismiss the petitions suggests that the revenue's implicit position was that the notice was valid and the petitioners should respond to it.
Which sections of the Income-tax Act were involved?
Section 148A(1)
AI-generated summary — verify with the full judgment below
Heard together (2 matters)
Read from the judgment's own cause title. This page is filed under one of them.
$~126 & 127 * IN THE HIGH COURT OF DELHI AT NEW DELHI
(126) + W.P.(C) 5056/2025 CM APPL. 23211/2025 CM APPL. 23212/2025
ERNST AND YOUNG U.S. LLP
.....Petitioner Through: Mr. Kamal Sawhney, Mr. Nikhil Agarwal & Mr. Nishank Vashistha, Advocates.
versus
ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE INTERNATIONAL TAXATION 1 2 2 DELHI .....Respondent
Through:
(127) + W.P.(C) 5057/2025 CM APPL. 23213/2025 CM APPL. 23214/2025
ERNST AND YOUNG EMEIA SERVICES LIMITED .....Petitioner Through: Mr. Kamal Sawhney, Mr. Nikhil Agarwal & Mr. Nishank Vashistha, Advocates.
versus
ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE INTERNATIONAL TAXATION 1 2 2 DELHI .....Respondent
Through:
CORAM:
HON'BLE MR. JUSTICE VIBHU BAKHRU
HON'BLE MR. JUSTICE TEJAS KARIA
22.04.2025 O R D E R 1. The petitioner has filed the present petitions, inter alia, impugning a notice dated 30.03.2025 issued under Section 148A(1) of the Income Tax Act, 1961 [the Act] for assessment year 2019-20. 2. It is the Petitioners’ case that the said notice is premised on the same reason which was subject matter of examination by this court in W.P.(C) 7578/2023 captioned ERNST AND YOUNG U.S. LLP vs. ASSISTANT COMMISSIONER OF INCOME TAX as well as ERNST AND YOUNG 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 21:10:27
EMEIA SERVICES LIMITED vs. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-INTERNATIONAL TAX-1-2-2, DELHI: Neutral Citation 2025:DHC:2124-DB. 3. Considering that the impugned notice is in the nature of a show cause notice, we do not consider it apposite to entertain the present petitions. We, however, clarify that, in the event, the petitioner responds to the said notice within a period of one week from the date, the Assessing Officer shall consider the response as well as the decisions of this Court as mentioned above and pass an appropriate order. 4. In view of the above, the petitions alongwith all the pending applications are dismissed. 5. All rights and contentions of the parties are reserved.
VIBHU BAKHRU, J
TEJAS KARIA, J APRIL 22, 2025/ ‘A’
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 01/07/2025 at 21:10:27
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