Chhattisgarh High Court Judgments — 2026

The High Court held that the orders passed under Section 148A(d) of the Income Tax Act, 1961, in all the writ petitions, and any consequential proceedings, are required to be quashed and set aside. The court directed the Assessing Officer to allow the petitioners to file fresh objections within 90 days. These objections can include new grounds, including jurisdictional ones, and can rely on applicable Supreme Court judgments. The Assessing Officer must then grant an opportunity for a hearing and pass orders in accordance with the law laid down by the Supreme Court in the cases of Ashish Agarwal and Rajeev Bansal. The court clarified that assessees can pursue all legal remedies except those already concluded by the aforementioned Supreme Court judgments. It also noted that observations made by the Supreme Court in paragraphs 112, 113, and 114 of Rajeev Bansal regarding orders passed beyond time shall apply.

The High Court held that the orders passed under Section 148A(d) of the Income Tax Act, 1961, in all the writ petitions, and any consequential proceedings, are required to be quashed and set aside. This decision is based on the Supreme Court's final pronouncements in Union of India vs. Rajeev Bansal and Union of India vs. Ashish Agarwal, which dealt with the validity of notices issued under Section 148 of the Income Tax Act, 1961, from April 1, 2021, to June 30, 2021. The Court directed the Assessing Officer to allow the petitioners to file fresh objections within 90 days. These objections can include jurisdictional issues and reliance on other Supreme Court judgments. The Assessing Officer must then provide an opportunity for a hearing and pass orders in accordance with the law laid down by the Supreme Court. The assessees are free to pursue all legal remedies except those already concluded by the cited Supreme Court judgments. The observations made by the Supreme Court in paragraphs 112, 113, and 114 of Rajeev Bansal (supra) regarding orders passed beyond time are also to be applied.

The High Court held that the orders passed under Section 148A(d) of the Income Tax Act, 1961, in all the writ petitions, and any consequential proceedings, are required to be quashed and set aside. This decision is based on the Supreme Court's final pronouncements in *Union of India vs. Rajeev Bansal* and *Union of India vs. Ashish Agarwal*, which dealt with the validity of notices issued under Section 148 of the Income Tax Act, 1961, from April 1, 2021, till June 30, 2021. The Court directed the Assessing Officer to allow the petitioners to file fresh objections within 90 days. These objections can include new grounds, including jurisdictional ones, and rely on applicable Apex Court judgments. After receiving the objections, the Assessing Officer must grant an opportunity of hearing and pass orders in accordance with the law laid down by the Supreme Court. The assessees are at liberty to pursue all legal remedies except those already concluded by the Supreme Court judgments. The observations made by the Supreme Court in *Rajeev Bansal* regarding orders passed beyond time were also to be applied.

The High Court quashed the orders issued under Section 148A(d) of the Income Tax Act, 1961, and the notices issued under Section 148 of the Act. The Court's decision was based on the concession made by the revenue before the Supreme Court in the cases of Union of India vs. Rajeev Bansal and Deepak Steel and Power Limited vs. Central Board of Direct Taxes & Ors. The Supreme Court had acknowledged that for the assessment year 2015-16, all notices issued on or after April 1, 2021, would have to be dropped as they would not fall for completion within the period prescribed under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. The High Court found no further adjudication necessary given this concession and the fact that the notices in question were dated June 25, 2021. The writ petitions were disposed of with these observations and directions.

The High Court held that the orders passed under Section 148A(d) of the Income Tax Act, 1961, in all the writ petitions, and any consequential proceedings, are required to be quashed and set aside. This decision is based on the Supreme Court's judgments in Union of India vs. Rajeev Bansal and Union of India vs. Ashish Agarwal, which have decided the issue regarding the validity of notices issued under Section 148 of the Income Tax Act, 1961, from April 1, 2021, till June 30, 2021. The Court directed the Assessing Officer to allow the petitioners to file fresh objections within 90 days, including jurisdictional ones, and to dispose of these objections in accordance with the law laid down by the Supreme Court. The assessees are permitted to raise new objections and rely on applicable Apex Court judgments. The authority must grant an opportunity of hearing before passing orders. The assessees can pursue all legal remedies except those concluded by the Supreme Court's judgments. The observations made by the Supreme Court in paragraphs 112, 113, and 114 of Rajeev Bansal (supra) regarding orders passed beyond time shall also apply.

The High Court held that the power under Section 119(2)(b) of the Income Tax Act, 1961, though seemingly discretionary, is coupled with a duty to exercise it when circumstances warrant to avoid genuine hardship. The Court found that the respondent authority had misdirected itself by not examining whether the failure to consider the claim for the option under Section 115BAB would cause genuine hardship. The Court emphasized that the phrase "genuine hardship" should be construed liberally, and the Legislature conferred the power to condone delay to enable authorities to do substantial justice. Relying on the principle that the power under Section 119(2)(b) is to be exercised liberally when genuine hardship exists, and citing the Bombay High Court's decision in Pankaj Kailash Agarwal v. Asst. CIT, the Court concluded that the rejection of the petitioners' claim would cause genuine hardship. Consequently, the impugned order dated October 3, 2023, and the rectification order dated November 28, 2023, were set aside. The delay in filing Form 10-ID was condoned, and the respondents were directed to keep the portal open for the petitioners to upload Form 10-ID within four weeks, after which their claim under Section 115BAB would be dealt with on merits.

The Tribunal held that the assessment order dated March 25, 2021, was passed at 19:38 hours, while the petitioner was granted time to file a reply until 23:59 hours on the same day. This meant the petitioner's right to file a reply was curtailed before the expiry of the granted time. Consequently, the Tribunal found that the impugned order was passed in utter violation of the principles of natural justice. The Tribunal quashed the impugned assessment order dated March 25, 2021, and directed the concerned authority to pass a fresh order after affording due opportunity of hearing to the petitioner. The ratio decidendi is that an assessment order passed before the expiry of the time granted for reply to a show cause notice violates natural justice.

The High Court, without delving into the merits of the case, disposed of the writ petition. The Court granted the petitioner liberty to avail the statutory remedy by filing an appeal before the Commissioner (Appeals) within 30 days from the date of the order. The Court directed that upon filing such an appeal, the appellate authority should decide all objections raised by the petitioner in an objective manner, in accordance with the law. The Court did not decide the validity of the Section 153A notice or the assessment proceedings themselves, leaving these for the appellate authority to adjudicate.

The High Court held that the Assessing Officer committed a grave legal error by processing the return under Section 143(1)(a) of the Act. On the date of the intimation order (27-02-2020), the issue of whether delayed deposit of employees' contribution, though made before the return filing due date, was deductible under Section 36(1)(va) read with Section 2(24)(x) or subject to Section 43-B, was highly debatable, pending before the Supreme Court in *Checkmate Services Pvt Ltd*. The scope of Section 143(1)(a) does not permit adjudication of debatable issues; it is for prima facie adjustments and correction of apparent errors. The AO should have resorted to Section 143(3) or Section 147. The Court also noted that the Revenue had previously withdrawn its appeals against similar ITAT orders in *Satpal Singh Sandhu* and *Parv Buildcon*, where it was held that Section 143(1)(a) could not be used for debatable issues. The ITAT's reliance on *M/s. BPS Infrastructure* was incorrect as that case did not involve the present substantial question of law. The disallowance made under Section 143(1)(a) was set aside. Liberty was granted to the Revenue to proceed in accordance with law. The substantial question of law was answered in favour of the assessee.

The High Court held that the Assessing Officer committed a grave legal error by processing the return under Section 143(1)(a) of the Act. On the date of the intimation order (3-1-2021), the issue of whether delayed deposit of employees' share of contribution towards ESI and EPF, even if deposited before the due date of filing the return, could be disallowed under Section 36(1)(va) read with Section 2(24)(x) or was subject to Section 43-B, was highly debatable and pending before the Supreme Court in *Checkmate Services Pvt Ltd*. The Supreme Court settled this issue on 12-10-2022. The AO should have resorted to Section 143(3) or Section 147 for such a debatable issue, not Section 143(1)(a), as per the principles laid down in *Kvaverner John Brown Engg. (India) Pvt. Ltd.* and *Rajesh Jhaveri Stock Brokers Pvt. Ltd.*. The Court also noted that the Revenue had withdrawn its appeals against similar ITAT orders in *Satpal Singh Sandhu* and *Parv Buildcon*, indicating a consistent stance that Section 143(1)(a) is not for debatable issues. The ITAT's reliance on *M/s. BPS Infrastructure* was found to be erroneous as that case was decided on limitation. The disallowance made under Section 143(1)(a) was set aside, and the orders of the CIT(Appeals) and ITAT were also set aside. Liberty was granted to the Revenue to proceed in accordance with law. The substantial question of law was answered in favour of the assessee.

The High Court, in its appellate jurisdiction, considered the submissions of both parties and perused the impugned order and other documents. The Court found that the learned Single Judge had dismissed the writ petition holding that, in view of the facts and the nature of the relief sought, no writ of mandamus could be issued to the respondents at that stage. The learned Single Judge had declined to exercise jurisdiction under Article 226 of the Constitution without entering into the merits of the allegations or examining the statutory obligations of the authorities. However, the appellant was granted liberty to avail appropriate remedies and raise all permissible defences before the concerned trial court in pending criminal proceedings. The High Court was of the considered opinion that the learned Single Judge had not committed any illegality, irregularity, or jurisdictional error in the impugned order warranting interference. Therefore, the writ appeal was dismissed. The Court did not decide on the merits of the tax evasion allegations or the applicability of limitation to independent investigations or prosecutions.

The High Court did not decide the merits of the penalty order. Instead, it permitted the petitioner to make a representation to the respondent authorities, enclosing a copy of the order passed in the appeal and the revision. The competent authority was directed to decide the issue concerning the penalty imposed within 45 days from the receipt of the order. The Court did not make any finding on the validity of the penalty or the assessment order, nor did it express any opinion on the arguments presented. The petition was disposed of with directions for a representation and a decision by the authority.