IBIBO GROUP PRIVATE LIMITED vs. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 10-1 & ANR.

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W.P.(C)/17643/2022HC DelhiDLHC01048991202212 July 2024Bench: HON'BLE MR. JUSTICE YASHWANT VARMA,HON'BLE MR. JUSTICE RAVINDER DUDEJA2 pages
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What did the High Court hold?

The Delhi High Court allowed the writ petition and quashed the impugned order dated June 29, 2022, passed under Section 148A(d) of the Income Tax Act, 1961, and the consequential proceedings. The Court's decision was based on its prior judgment in Twylight Infrastructure (P) Ltd. v. CIT, which held that reassessment proceedings initiated without the approval of the specified authority under Section 151(ii) of the Act are invalid. The ratio decidendi is that the procedural safeguard of obtaining approval from the designated authority before issuing a notice for reassessment is mandatory, and its absence vitiates the entire process. The Court granted liberty to the revenue to initiate reassessment proceedings afresh, if deemed necessary, subject to compliance with the law, and with the caveat that the rights and contentions of both parties would remain open in such an event. No specific issue was left undecided.

What were the facts?

The petitioner, Ibibo Group Private Limited, filed a writ petition before the Delhi High Court challenging an order dated June 29, 2022, passed under Section 148A(d) of the Income Tax Act, 1961, and consequential reassessment proceedings. The revenue, represented by the Assistant Commissioner of Income Tax, Circle 10-1, and another, was the respondent. The High Court considered the matter in light of its previous judgment in Twylight Infrastructure (P) Ltd. v. CIT. The specific assessment year(s) and the amount in dispute are not recorded in the judgment. The procedural history primarily involves the issuance of the impugned order and the subsequent challenge via a writ petition.

What were the issues?

1. Whether the impugned order passed under Section 148A(d) of the Income Tax Act, 1961, and the consequential reassessment proceedings are liable to be quashed on the ground of lack of proper approval as required by Section 151(ii) of the Act. The assessee (petitioner) argued that the reassessment proceedings were vitiated due to the absence of approval from the specified authority as mandated by Section 151(ii) of the Income Tax Act, 1961. The assessee relied on the High Court's judgment in Twylight Infrastructure (P) Ltd. v. CIT. The revenue (respondent) contended that while they sought liberty to initiate reassessment proceedings afresh if the impugned orders were set aside, they did not contest the grounds raised by the assessee concerning the lack of approval. The revenue's position was that if the orders were quashed on this ground, they should be permitted to commence reassessment proceedings anew, as per law.

Which sections of the Income-tax Act were involved?

Section 148A,Section 151

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$~25 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 17643/2022

IBIBO GROUP PRIVATE LIMITED

.....Petitioner

Through: Mr. Sumit Lalchandani, Adv.

versus ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 10-1 & ANR.

.....Respondent Through: Mr. Sanjay Kumar, Ms. Esha Kadian, Advocates. CORAM:

HON'BLE MR. JUSTICE YASHWANT VARMA

HON'BLE MR. JUSTICE RAVINDER DUDEJA

12.07.2024 O R D E R 1. On hearing learned counsels for parties, we find that the issues and the challenge raised, stands concluded in light of the judgment rendered by the Court in Twylight Infrastructure (P) Ltd. v. CIT [2024 SCC OnLine Del 330]. W.P.(C) 17643/2022 2. Accordingly, for the reasons assigned in the aforenoted judgment, we allow the instant writ petition and quash the impugned order dated 29 June 2022 passed under Section 148A(d) of the Income Tax Act, 1961 and consequential proceedings initiated thereto, subject to liberty reserved as per paragraph nos. 28 to 30 of Twylight Infrastructure, and which read as under: “28. Before us, the counsel for the revenue continue to hold this position. The only liberty that they seek is that if, based on the judgment in Ganesh Dass Khanna, the impugned orders and notices are set aside, liberty be given to the revenue to commence reassessment proceedings afresh. 29. Therefore, having regard to the aforesaid, the impugned notices and orders in each of the above-captioned writ petitions are quashed on the ground that there is no approval of the specified authority, as indicated in Section 151(ii) of the Act. The direction 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 18/07/2024 at 12:13:12

is issued with the caveat that the revenue will have liberty to take steps, if deemed necessary, albeit as per law. 30. Needless to add, the rights and contentions of both the sides will remain open, in the event the revenue triggers reassessment proceedings.” 3. The writ petition is disposed of accordingly.

YASHWANT VARMA, J.

RAVINDER DUDEJA, J. JULY 12, 2024/neha 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 18/07/2024 at 12:13:12

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