UPES (FORMERLY KNOWN AS UNIVERSITY OF PETROLEUM AND ENERGY STUDIES) vs. ASSISTANT COMMISSIONER OF INCOME TAX & ORS.

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W.P.(C)/7377/2023HC DelhiDLHC01021036202326 May 2023Bench: HON'BLE MR. JUSTICE RAJIV SHAKDHER,HON'BLE MR. JUSTICE GIRISH KATHPALIA5 pages
AI SummaryPartly Allowed

What did the High Court hold?

The High Court held that the notice dated 23.05.2022 under Section 148A(b) of the Act cannot be declared untenable in law. This is because, as conceded by the petitioner, the limitation for AY 2019-20 would have expired only on 31.03.2023. The mere reference to the Supreme Court's judgment in Ashish Aggarwal's case does not render the notice invalid, especially since it is common ground that post-01.04.2021, notices could only be issued under the new regime, and the notice in question was indeed issued under Section 148A(b). However, the court found merit in the petitioner's second contention. Since proceedings on the same aspects had been dropped in other AYs, and regular/scrutiny assessments for AY 2018-19 and AY 2020-21 had also dealt with these issues, the AO was required to consider these aspects before passing the assessment order for AY 2019-20. The court emphasized the principle of consistency, citing Radhasaomi Satsang v CIT (1992) 193 ITR 321 (SC), and directed the AO to accord a personal hearing to the petitioner's representative and pass a speaking assessment order addressing these points. The writ petition was disposed of in these terms.

What were the facts?

The petitioner, UPES (formerly University of Petroleum and Energy Studies), filed a writ petition challenging an order dated 30.07.2022 passed under Section 148A(d) of the Income Tax Act, 1961, and a consequential notice dated 31.07.2022 under Section 148. The petition also challenged a prior notice dated 07.06.2021 under Section 148 and an intimation letter dated 23.05.2022 (acting as a notice under Section 148A(b)). The reassessment proceedings were triggered for Assessment Year (AY) 2019-20, following a survey conducted on 22.12.2020, which had also led to reassessment proceedings for AYs 2013-14 to 2017-18. The petitioner argued that the issues subject to reassessment for AY 2019-20 were also dealt with in regular assessment for AY 2018-19 and scrutiny assessment for AY 2020-21.

What were the issues?

1. Whether the notice dated 23.05.2022 issued under Section 148A(b) of the Act is unsustainable in law, given its reference to the Supreme Court's decision in Union of India vs. Ashish Aggarwal, when the limitation for AY 2019-20 would have expired on 31.03.2023. - Assessee's contention: The notice is unsustainable because the Supreme Court's decision in Ashish Aggarwal, which provided leeway for reassessment, was not applicable as the limitation for AY 2019-20 had not expired by the relevant time. - Revenue's contention: The notice is sustainable because the limitation had not expired at the relevant point in time, making the reference to Ashish Aggarwal's case irrelevant to its validity. 2. Whether the Assessing Officer (AO) failed to consider that reassessment proceedings for AYs 2013-14 to 2017-18 were initiated based on the same survey, and that the issues for AY 2019-20 were also addressed in regular and scrutiny assessments for AY 2018-19 and AY 2020-21, respectively. - Assessee's contention: The AO did not consider these aspects, which were communicated by the petitioner on 13.06.2022, while passing the order under Section 148A(d). - Revenue's contention: Since an assessment order has not yet been passed for AY 2019-20, the AO can consider the record of earlier AYs and the reasons for dropping proceedings.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148,Section 147

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W.P.(C) 7377/2023 Page 1 of 5

$~40 * IN THE HIGH COURT OF DELHI AT NEW DELHI %

Date of decision: 26.05.2023 + W.P.(C) 7377/2023 UPES (FORMERLY KNOWN AS UNIVERSITY OF PETROLEUM AND ENERGY STUDIES)

..... Petitioner Through: Mr Rohit Jain with Mr Aniket D. Agrawal and Mr Abhishek Singhvi, Advocates.

versus

ASSISTANT COMMISSIONER OF INCOME TAX & ORS.

..... Respondents Through: Mr Aseem Chawla, Sr. Standing Counsel with Ms Pratishtha Chaudhary and Mr Aditya Gupta, Advocates.

CORAM:

HON'BLE MR JUSTICE RAJIV SHAKDHER

HON'BLE MR JUSTICE GIRISH KATHPALIA [Physical Hearing/Hybrid Hearing (as per request)] RAJIV SHAKDHER, J.: (ORAL)

CM APPL. 28735/2023 1. Allowed, subject to the petitioner filing legible copies of the annexures. W.P.(C) 7377/2023 & CM APPL. 28734/2023 [Application filed on behalf of the petitioner for interim relief] 2. Issue notice. Digitally Signed By:TARUN RANA Signing Date:22.06.2023 17:27:28 Signature Not Verified

W.P.(C) 7377/2023 Page 2 of 5

3.

Mr Aseem Chawla, learned senior standing counsel, who appears on behalf of the respondents/revenue, accepts notice. 3. In view of the directions that we propose to issue Mr Chawla says that he does not wish to file a counter-affidavit in the matter, and he will argue the matter based on the record presently available to the court. 4. Therefore, with the consent of the counsel for parties, the writ petition is taken up for hearing and final disposal, at this stage itself. 5. This writ petition is directed against order dated 30.07.2022 passed under Section 148A(d) of the Income Tax Act, 1961 [in short, “Act”]. Besides this, challenge is also laid to the consequential notice dated 31.07.2022 issued under Section 148 of the Act. 5.1 In addition, the petitioner has also assailed the notice dated 07.06.2021 issued under Section 148 of the Act and the intimation letter dated 23.05.2022 which is, in effect, a notice under Section 148A(b) of the Act. 6. Mr Rohit Jain, learned counsel who appears on behalf of the petitioner, makes two broad submissions in support of the petitioner’s case. (i) First, the notice dated 23.05.2022 issued under Section 148A(b) of the Act is unsustainable in law. According to Mr Jain, in the said notice, there is a reference to the decision of the Supreme Court rendered in Union of India vs Ashish Aggarwal, (2022) 444 ITR 1 (SC). It is Mr Jain’s contention that limitation for the Assessment Year (AY) in issue, i.e., AY 2019-20, would have expired, at the relevant time, only on 31.03.2023. Therefore, the respondents/revenue could not have taken recourse to the leeway granted via the aforementioned judgment of the Supreme Court. Digitally Signed By:TARUN RANA Signing Date:22.06.2023 17:27:28 Signature Not Verified

W.P.(C) 7377/2023 Page 3 of 5

(ii) Second, the genesis of the reassessment triggered against the petitioner is a survey which was conducted on 22.12.2020 qua the petitioner and “other persons”. It is contended that because of the survey, reassessment proceedings were triggered for AYs 2013-14 to 2017-18. 7. Mr Jain says that a perusal of the record concerning AYs 2013-14 to AY 2017-18 would show that the reasons which propelled the Assessing Officer (AO) to initiate proceedings under Section 147-148 of the Act, were not different from those which have triggered reassessment proceedings for AY 2019-20. 8. As a matter of fact, Mr Jain says that the regular assessment carried out in AY 2018-19 and scrutiny assessment carried out in AY 2020-21, also dealt with the issues which are subject matter of the AY with which the instant writ petition is concerned, i.e., 2019-20. 9. In sum, it is Mr Jain’s contention that these aspects were put to the AO by the petitioner in his communication dated 13.06.2022, have not been considered by the AO while passing the order dated 30.07.2022, under Section 148A(d) of the Act. 10. Mr Chawla says, insofar as the first contention advanced by Mr Jain is concerned that the same is unsustainable in law. It is Mr. Chawla’s contention that since limitation had not expired at the relevant point in time, the notice dated 23.05.2022 issued under Section 148A(b) of the Act is sustainable, notwithstanding reference, as contended by the Mr Jain, to the judgment of the Supreme Court in Ashish Aggarwal’s case. 11. Insofar as the other aspect is concerned, Mr Jain says that since an assessment order has not been passed for AY 2019-20, the AO could Digitally Signed By:TARUN RANA Signing Date:22.06.2023 17:27:28 Signature Not Verified

W.P.(C) 7377/2023 Page 4 of 5

consider the record of the earlier AYs and the reasons for dropping the proceedings to which Mr. Jain has made a reference. 12. We have heard learned counsel for the parties. We are in agreement with Mr Chawla that the notice dated 23.05.2022 issued under Section 148A(b) of the Act cannot be declared as being untenable in law, since even according to Mr. Jain, the limitation qua AY 2019-20 would have expired only on 31.03.2023. 13. Merely because there is a reference to the judgment of Supreme Court in Ashish Aggarwal’s case, which according to Mr Jain would not apply qua the AY in issue, would have render the notice untenable, as it is common case of counsel for parties that after 01.04.2021, notices could have issued only under the new regime. 14. Mr Jain cannot but accept that the notice dated 23.05.2022 has been issued under the new regime, i.e., under Section 148A(b) of the Act. 15. However, Mr Jain’s argument carry weight insofar as the second aspect is concerned, i.e., that since proceedings on the very same aspects have been dropped in other AYs, that aspect required attention of the AO. 16. Since according to Mr Jain, assessment order has not been passed, the assessing officer will advert to the record of the earlier assessment years before passing the assessment order. It is ordered accordingly. 17. We are conscious of the fact that the rule of res-judicata does not apply, i.e., that each assessment year is different. That being said, if the reasons for reopening are consistently similar or same, the assessing officer needs to apply the principle of consistency before passing the assessment order. [See Radhasaomi Satsang v CIT (1992) 193 ITR 321 (SC)] Digitally Signed By:TARUN RANA Signing Date:22.06.2023 17:27:28 Signature Not Verified

W.P.(C) 7377/2023 Page 5 of 5

18.

The assessing officer will thus accord personal hearing to the authorized representative of the petitioner. 19. For this purpose, the AO will issue a notice to the petitioner which would indicate the date and time of the hearing. Needless to add, the AO will pass a speaking assessment order wherein the aforementioned aspect would be dealt with, i.e., that assertion that assessments have been completed for the AYs 2018-19 and 2020-21, involving aspects which are subject matter of the AY in issue. 20. The writ petition is disposed of, in the aforesaid terms. 21. Consequently, the pending application shall stand closed. 22. Parties will act based on the digitally signed copy of the order.

RAJIV SHAKDHER, J

GIRISH KATHPALIA, J

MAY 26, 2023 / tr Digitally Signed By:TARUN RANA Signing Date:22.06.2023 17:27:28 Signature Not Verified

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