PR. COMMISSIONER OF INCOME TAX -7 vs. RAJA ARORA
What did the High Court hold?
The High Court heard arguments from both sides regarding whether a search was conducted in the assessee's case and which paragraph of the CBDT instructions applied. The court adjourned the hearing to allow the Revenue to take further instructions.
What were the facts?
The Revenue appealed an ITAT order that set aside the assessment. The ITAT's decision was based on the assessment being selected for scrutiny under CBDT Instruction No. 5/2017. The Revenue argued the assessee's case was a search case, justifying scrutiny under paragraph 1(iii) of the instructions.
What were the issues?
The primary issue is whether the assessee's income was correctly selected for scrutiny under the applicable CBDT instructions, specifically concerning whether a search operation had taken place.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
$~77 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 132/2025 PR. COMMISSIONER OF INCOME TAX -7 .....Appellant Through: Mr Ruchir Bhatia, SSC, Mr Anant Mann, JSC Ms Aditi Sabharwal and Mr Abhishek Anand, Advocates. versus RAJA ARORA .....Respondent Through: Mr Rajiv Saxena, Ms Sumangla Saxena, Mr Shyam Sundar and Mr Dishant Sethi, Advocates. CORAM: HON'BLE MR. JUSTICE VIBHU BAKHRU HON'BLE MR. JUSTICE TEJAS KARIA O R D E R % 06.05.2025 CM APPL. 27318/2025(condonation of delay in filing) 1. For the reasons stated in the application, the delay in filing the above captioned appeal stands condoned. 2. The application stands disposed of. ITA 132/2025 3. The Revenue has filed the present appeal under Section 260A of the Income Tax Act, 1961 [the Act] impugning an order dated 24.10.2024 [impugned order] passed by the learned Income Tax Appellate Tribunal [ITAT], inter alia, for setting aside the assessment order on the ground that the Assessee’s income was selected for scrutiny as per the instructions issued by the Central Board of Direct Taxes [instruction no.5/2017 dated 07.07.2017]. 4. Mr Bhatia, the learned counsel appearing for the Revenue submits 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 27/03/2026 at 11:49:01
that the impugned order is patently erroneous as the Assessee’s case was a search case and, therefore, in terms of paragraph no.1(iii) of the instructions, the Assessee’s return was selected for scrutiny. He also refers to the assessment order, which specifically refers that the search and seizure operation was conducted in the premises of the Assessee comprising of Airwil group of cases. 5. The learned counsel for the respondent submits that no search was conducted in the case of the Assessee and therefore, paragraph no.1(iii) of the instructions will not apply in the present case. He also submits that another notice dated 29.09.2017 was issued by the Deputy Commissioner of Income Tax [DCIT], which fairly states that the Assessee’s income had been selected for scrutiny on the basis of paragraph no.1(vi) of the Manual Compulsory Scrutiny Guidelines for CBDT. 6. Mr Bhatia seeks time to take instructions in this regard. 7. At his request, list on 14.05.2025. Since, some arguments have been heard it is clarified that an endeavour would be made on the next date of hearing to hear the appeal on the questions of law as projected by the Revenue. VIBHU BAKHRU, J TEJAS KARIA, J MAY 06, 2025 M 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 27/03/2026 at 11:49:01
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