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The Delhi High Court held that the notice dated 23.07.2022 issued under Section 148 of the Income Tax Act, 1961, and all proceedings initiated pursuant thereto are liable to be quashed and set aside. The Court's decision was based on the concession made by the Revenue before the Supreme Court in Union of India and Ors. v. Rajeev Bansal (2024 INSC 754). The relevant part of the concession, as quoted in paragraph 19(f) of the Rajeev Bansal judgment, stated that for the assessment year 2015-2016, all notices issued on or after April 1, 2021, would have to be dropped as they would not fall for completion during the period prescribed under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. The Court also referred to the Supreme Court's decision in Deepak Steel and Power Ltd. v. Central Board of Direct Taxes and Ors. (Civil Appeal No.5177/2025, decided on 02.04.2025), where similar appeals were allowed based on the same concession. The Court found that the present case was covered by the concession and the aforementioned Supreme Court decisions, including its own decision in Makemytrip India Pvt. Ltd. v. Deputy Commissioner of Income Tax Circle 16 (1) Delhi & Anr. (Neutral Citation No.: 2025:DHC:1892-DB). The petition was accordingly allowed, and all proceedings were set aside.
The Delhi High Court held that the rejection of the petitioner's application under the DTVSV Scheme was erroneous. The Court found that the Revenue's reasoning, based on the petitioner not claiming carry forward of loss in the subsequent assessment year (AY 2023-24), was flawed. Rule 9 of the DTVSV Rules, framed under Section 99(2)(a) of the FA2 Act, provides the manner for computing disputed tax and does not control or curtail the scope of the main enactment. The fact that the petitioner did not claim the carry forward loss in the subsequent year does not preclude it from settling its dispute for AY 2022-23 under the DTVSV Scheme. The implication of not claiming the loss in the next assessment year is merely the denial of that specific benefit for that year, not the invalidation of its entitlement to claim the loss in the prior assessment year. The Court distinguished between an assessee being entitled to a benefit and the assessee claiming it. The determination of whether a dispute relating to a particular assessment year can be settled should be confined to issues of that year and not made contingent on actions in subsequent years. The Designated Authority was directed to process the petitioner's application in accordance with the DTVSV Scheme and Rules.
The High Court noted that the ITAT's decision hinged on a factual controversy regarding whether group companies had discharged the liability. The court found that the issue of remission of liability had not been adequately examined.
The Delhi High Court directed the concerned authorities to process the petitioner's claim for refund along with interest in accordance with law. The Court emphasized that the processing should be done expeditiously and in any event within a period of six weeks from the date of the order. The Court also referred to its previous decision in Ms. Anjul v. Office of Principal Commission of Income-tax: [2022] 145 taxmann.com 140 (Del.) as a guiding principle for processing the refund. The petition was disposed of in terms of this direction. No specific issue was left undecided; the court granted the primary relief sought by the petitioner.
The Delhi High Court allowed the present petition and set aside the impugned notice dated 31.03.2024 issued under Section 148 of the Income Tax Act, 1961, along with all proceedings initiated pursuant thereto. The Court found that the notice was issued beyond the period of limitation. Relying on its earlier decision in Principal Commissioner of Income-tax (Central-1) v. Ojjus Medicare (P.) Ltd., the Court held that the period of ten years for issuing a notice under Section 153A of the Act is to be computed from the end of the assessment year relevant to the financial year in which the search was conducted. Given the search date of 20.07.2022, the ten-year period for AY 2013-14 had expired, making the issuance of a notice under Section 148, by virtue of the first proviso to Section 149(1), impermissible. The Court did not address the challenge to Explanation 2 to Section 148 as the petition was allowed on the ground of limitation.
The Delhi High Court allowed the petition. The Court held that the impugned notice dated 31.03.2024 issued under Section 148 of the Income Tax Act, 1961, for AY 2013-14, was barred by limitation. The Court relied on its previous decision in Principal Commissioner of Income-tax (Central-1) v. Ojjus Medicare (P.) Ltd. ([2024] 161 taxmann.com 160 (Delhi)). This precedent established that the ten-year period under Explanation 1 to Section 153A(1) of the Act is computed from the end of the assessment year relevant to the financial year in which the search was conducted. For a search on 20.07.2022, the ten-year period for initiating proceedings under Section 153A would end on 31.03.2023, making AY 2013-14 (which falls beyond this period) time-barred for such proceedings. Consequently, the first proviso to Section 149(1) prevented the issuance of a Section 148 notice. The impugned notice and all proceedings pursuant thereto were set aside.
The High Court found that the TPO's fundamental premise that the assessee received no services was rejected by the ITAT and CIT(A). Therefore, the matter was remanded to the TPO to reconsider the transfer pricing analysis and whether conditions under Section 92C(3) were met.
The High Court admitted the appeal on substantial questions of law concerning the validity of an assessment framed in violation of Section 153A and whether fresh claims under Section 153A can be declined due to an invalid original assessment.
The High Court held that the present case does not fall within the exception to Sub-section (1A) of Section 149 of the Act. The Court found no merit in the Revenue's contention that the entire quantum of funds moved out of India should be aggregated. It was apparent from the information that the amounts remitted, alleged to have escaped assessment, were payments made by the petitioner to its associated enterprises (AEs) for services rendered. The question of whether services were rendered and if they were at Arm's Length Price (ALP) is a contentious issue, but the Court noted that the alleged escaped income was not based on a single occasion or event. Instead, it was an amount regularly paid by the petitioner for services claimed to have been received. The Court also noted that these payments were subject to assessment in various previous years and had been referred to the Transfer Pricing Officer (TPO). Therefore, the impugned notice and all consequential proceedings were set aside. The Court relied on its earlier decision in M/s. L-1 Identity Solutions Operating Company Private Limited v. Assistant Commissioner of Income Tax, Central Circle-25.
The Tribunal held that the assessee failed to establish the genuineness of liabilities reflected as payable to Bank of Baroda and Punjab National Bank. The High Court found no perversity or illegality in the ITAT's decision, as the core issue was a question of fact.
The Court held that the reassessment proceedings initiated by the notice dated 24.05.2021 and the subsequent order dated 02.12.2022 are set aside. The primary reason for this decision is that the reassessment proceedings are barred by limitation under the first proviso to Section 147 of the Act, as it stood prior to 01.04.2021. This proviso stipulates that no action can be taken after the expiry of four years from the end of the relevant assessment year, unless income escaped assessment due to the assessee's failure to disclose fully and truly all material facts. In this case, the petitioner had expressly disclosed in its accounts that the 'wages and salaries' included ₹6.29 crores pertaining to prior financial years. Therefore, the condition for invoking the proviso was not met, and the reassessment was time-barred. The Court also found merit in the contention that the income had not escaped assessment, as the liability for the prior period expenses had crystallized during AY 2013-14 due to a retrospective revision of employee remuneration by NTPC Limited, and the petitioner had correctly debited its profit and loss account.
The High Court held that the impugned notice dated 23.07.2022 issued under Section 148 of the Income Tax Act, 1961, and all proceedings relating thereto are required to be set aside. The Court relied on the concession made by the Revenue before the Supreme Court in Union of India and Ors. v. Rajeev Bansal (2024 INSC 754), specifically paragraph 19(f). This paragraph stated that for AY 2015-16, all notices issued on or after 1 April 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 Court also noted a similar decision in Deepak Steel and Power Ltd. v. Central Board of Direct Taxes and Ors. (Civil Appeal No.5177/2025, decided on 02.04.2025), where the Supreme Court allowed appeals based on the same concession. The Court further referenced its own decision in Makemytrip India Pvt. Ltd. v. Deputy Commissioner of Income Tax Circle 16 (1) Delhi & Anr. The petition was allowed, and all proceedings initiated pursuant to the notice were set aside.
The High Court held that the present case does not fall within the exception provided under Section 149(1A) of the Act. The court found no merit in the Revenue's contention that the entire quantum of funds moved out of the country should be aggregated for determining the threshold under Section 149(1)(b). It was apparent from the information that the amounts alleged to have escaped assessment were payments made by the petitioner to its AEs for services rendered. The question of whether services were rendered and at Arm's Length Price (ALP) was a contentious issue, but the alleged escaped income was not based on a single occasion or event. Instead, it was a regular payment for services claimed to have been received, and these payments were subject to assessment in previous years, with references made to the Transfer Pricing Officer (TPO) for ALP determination. Therefore, the impugned notice and all consequential proceedings were set aside, following the court's decision in M/s. L-1 Identity Solutions Operating Company Private Limited v. Assistant Commissioner of Income Tax, Central Circle-25.
The High Court allowed the petition and set aside the impugned notice as being barred by limitation. The Court relied on its earlier decisions in Dinesh Jindal v. Assistant Commissioner of Income Tax, Central Circle 20, Delhi & Ors., KAD Housing Private Limited v. Deputy Commissioner of Income Tax Central Circle-6, Delhi, and Pankaj Jain v. Assistant Commissioner of Income Tax, Central Circle 3, Delhi & Anr. The reasoning, as indicated by the cited judgments, suggests that the limitation period for issuing a notice under Section 148, in cases stemming from a search, needs to be reckoned in accordance with the provisions of Section 153C and the first proviso to Section 149(1) as they stood prior to the Finance Act, 2021. The Court noted that the block of ten assessment years is required to be reckoned from the end of AY 2024-25, which is the assessment year relevant to the financial year in which the impugned notice was issued on 30.03.2024. This calculation places AY 2014-15 outside the permissible ten-year period. The revenue's counsel conceded to this position.
The Delhi High Court held that the contention that the time period stipulated under Section 149 of the Act is not applicable in the given facts is erroneous and rejected it. The Court referred to its own decision in ARN Infrastructures India Ltd. v. Assistant Commissioner of Income Tax Cental Circle-28 Delhi & Ors. (Neutral Citation No.: 2024:DHC:7423-DB), which had dealt with a similar contention. The Court clarified that the Supreme Court's observations in Abhisar Buildwell (P.) Ltd. were not a carte blanche to override the restrictions in Section 149. The Supreme Court's intent was to convey that the annulment of search assessments would not deprive the Revenue of its power to reassess, but such reassessment must be in accordance with law and subject to the conditions envisaged in Sections 147 and 148 of the Act. Therefore, the impugned notice, being beyond the period stipulated in Section 149, was set aside. The petition was allowed, and the pending applications were disposed of.
The CIT(A) had examined the facts and concluded that the Assessee had discharged its onus to establish the creditworthiness and genuineness of the transaction. The ITAT rejected the Revenue's appeal.
The Delhi High Court held that the controversy is covered by its earlier decision in ARN Infrastructures India Ltd. v. Assistant Commissioner of Income Tax Cental Circle-28 Delhi & Ors. The Court reiterated that the Supreme Court's observations in Principal Commissioner of Income-tax, Central-3 v. Abhisar Buildwell (P.) Ltd. were not a carte blanche to override the restrictions in Section 149 of the Act. The Supreme Court's liberty to initiate reassessment was subject to the fulfillment of conditions mentioned in Sections 147/148 and compliance with the chapter pertaining to reassessment. The Court found that the Revenue's contention that the time period under Section 149 is not applicable was erroneous. Therefore, the impugned notice was set aside. The Court did not expressly leave any issue undecided.
The High Court noted that the Income Tax Appellate Tribunal (ITAT) has not returned a specific finding in respect of Assessment Year (AY) 2010-11. The Court acknowledged the appellant's contention that the facts for AY 2013-14 are materially different, as the Assessing Officer and CIT(A) possessed relevant material to determine that the purchases made by the assessee were bogus. The Court has issued notice to the respondent, making the appeal returnable on 17.11.2025. No decision on the merits of the case has been made at this stage. The operative direction is to issue notice.
The Delhi High Court allowed the petition and set aside the impugned notice as being barred by limitation. The court relied on its previous decisions in Dinesh Jindal v. Assistant Commissioner of Income Tax, Central Circle 20, Delhi & Ors., KAD Housing Private Limited v. Deputy Commissioner of Income Tax Central Circle-6, Delhi, and Pankaj Jain v. Assistant Commissioner of Income Tax, Central Circle 3, Delhi & Anr. These decisions clarified that even for searches conducted after 01.04.2021, the first proviso to Section 149(1) mandates an examination of the timeframes as they stood under Sections 149(1)(b), 153A, and 153C prior to the Finance Act, 2021. The court further referred to the principles laid down in Principal Commissioner of Income Tax- Central-1 v. Ojjus Medicare Pvt. Ltd. regarding the computation of the block of six and ten years for Section 153C, emphasizing that the starting point for computation is the date of receipt of seized material by the jurisdictional AO, not the date of search. Applying these principles, the court found the notice to be time-barred. No issue was expressly left undecided.
The High Court set aside the impugned order of the ITAT. The matter was remanded back to the ITAT for a fresh consideration of the issue concerning the proviso to Section 80IA(4).
The Delhi High Court allowed the petition and set aside the impugned notice. The Court relied on its own decision in ARN Infrastructures India Ltd. v. Assistant Commissioner of Income Tax Cental Circle-28 Delhi & Ors. The Court held that the liberty granted to the Revenue by the Supreme Court in Abhisar Buildwell Pvt. Limited to resort to reassessment in cases where search did not yield incriminating material was subject to the fulfillment of conditions mentioned in Sections 147/148 of the Act and compliance with the chapter pertaining to reassessment. The Court explicitly rejected the contention that the time period stipulated under Section 149 of the Act is not applicable in the given facts, finding it erroneous. Therefore, the reassessment proceedings initiated under Section 148 were deemed invalid for not complying with the statutory prescriptions, including the limitations under Section 149.
The Delhi High Court held that the notice dated April 23, 2024, issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2016-17, was barred by limitation. The Court relied on the Supreme Court's decision in Union of India & Others v. Rajeev Bansal, which clarified that a notice under Section 148 of the new regime cannot be issued if the period of six years from the end of the relevant assessment year has expired at the time of issuance of the notice, as per the first proviso to Section 149(1)(b) of the old regime. In this case, the six-year period from the end of Assessment Year 2016-17 expired on March 31, 2023. Since the impugned notice was issued thereafter, it was found to be beyond the permissible time limit. The Court also noted that the Revenue's counsel concurred with this view. Consequently, the impugned notice was set aside, and the petition was allowed.
The Tribunal held that the averment that the petitioner had deducted tax at a lower rate in regard to payments made to Sir Ganga Ram Hospital pursuant to a certificate dated May 8, 2015, was not controverted. Therefore, there was no material on record to suspect that the petitioner had failed to deduct TDS or deposit it. The allegation on which the impugned notice was stated to have been issued was sufficiently addressed by the petitioner. Consequently, the Tribunal found no proceedings under Section 201 of the Act were warranted. The impugned notice was set aside, and the respondents were restrained from initiating any proceedings pursuant to it. The larger question of whether a notice for TDS verification can be initiated was not examined.
The Delhi High Court directed the respondents (Commissioner of Income Tax (Exemption) Delhi & Anr.) to decide the petitioner's application for condonation of delay in filing Form 10BB for AY 2020-21, which was filed on 13.03.2024, as expeditiously as possible, and in any event, within a period of eight weeks from the date of the order. The Court clarified that all rights and contentions of the parties were reserved. The reasoning was based on the Revenue's fair submission that they had no objection to a direction for adjudication of the earlier application. The Court did not decide on the merits of the condonation application itself, nor did it address the rejection of the later application dated 19.12.2024, as the focus shifted to the adjudication of the earlier one. The operative direction was to decide the application filed on 13.03.2024.
The Tribunal held that multiple floors or units within a property can be considered as a single residential house for the purpose of Section 54F deduction. It also found no failure on the part of the assessee in disclosing material facts.
The Tribunal held that multiple floors or units within a property can be considered as a single residential house for the purpose of Section 54F deduction. It also found no failure on the part of the assessee in disclosing material facts.
The Tribunal held that multiple floors or units within a property can be considered as a single residential house for the purpose of Section 54F deduction. It also found no failure on the part of the assessee in disclosing material facts.
The Delhi High Court held that the notice dated 11.07.2022, issued under Section 148A(d) of the Act, was beyond the period of limitation. The Court reasoned that after considering the exclusion of the period from the issuance of the initial notice till 04.05.2022 (as per Union of India v. Rajeev Bansal) and the time provided for the Assessee to respond, the AO had a limited window to issue the final notice. The AO had seven days after receiving the Assessee's reply (which was not filed) to issue the notice, and this period expired on 18.06.2022. Since the impugned notice was issued on 11.07.2022, it was beyond the prescribed period. The Court found that this controversy was covered in favour of the Assessee by its own prior decision in Ram Balram Buildhome Pvt. Ltd. v. Income Tax Officer and Anr. Consequently, the petition was allowed, and all proceedings initiated pursuant to the impugned notice were set aside.
The High Court held that the question of whether the decision in Principal Commissioner of Income-tax, Central-3 v. Abhisar Buildwell (P.) Ltd. (supra) constitutes a finding and direction permitting the issuance of a Section 148 notice beyond the period stipulated under Section 149 is no longer res integra. The Court referred to its own decision in ARN Infrastructures India Ltd. v. Assistant Commissioner of Income Tax Cental Circle-28 Delhi & Ors. (2024:DHC:7423-DB), which rejected a similar contention. The Court reiterated that the Supreme Court's observations in Abhisar Buildwell, while acknowledging the Revenue's need for a remedy in cases of search without incriminating material, were subject to the fulfillment of conditions mentioned in Sections 147/148 and compliance with the reassessment chapter, including Section 149. The Court found that the Supreme Court's observations could not be read as a carte blanche to override Section 149. Therefore, the contention that the time period under Section 149 is not applicable was rejected. The impugned notice was set aside.
The Delhi High Court held that the impugned notice dated August 31, 2024, issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2014-15 is barred by limitation. The Court relied on its decision in Manju Somani v. Income Tax Officer Ward-70(1) & Ors and the Supreme Court's judgment in Union of India & Others v. Rajeev Bansal. The reasoning was that the period of six years from the end of the relevant assessment year (2014-15) expired on March 31, 2021. As the notice was issued after this date, it was found to be beyond the permissible time limit. The Court set aside the impugned notice and allowed the petition. The ratio decidendi is that notices under Section 148 for assessment years prior to April 1, 2021, must adhere to the time limits prescribed under the old regime, and if the six-year period from the end of the relevant assessment year has expired, such notices cannot be issued.
The Delhi High Court disposed of the appeal. The Court noted the Assessee's declaration under the Direct Tax Vivad Se Vishwas Scheme, 2024, and the payment of the determined amount. The Court clarified that the Revenue would be entitled to revive the appeal if the final certificate settling the dispute was not issued within a reasonable period. This implies that the disposal was conditional on the finalization of the Vivad Se Vishwas settlement. The operative direction was to dispose of the appeal and the application, with the possibility of revival. No specific issue regarding the merits of the original appeal was decided.
The tribunal held that the Entertainment Tax Subsidy received by the assessee was a capital receipt, not taxable as income. This decision was based on the purpose of the subsidy scheme, which was to encourage capital-intensive multiplex development.
The Delhi High Court held that the contention that the time stipulated under Section 149 of the Income Tax Act, 1961, is not applicable in the given facts is erroneous and rejected it. The Court referred to its own decision in ARN Infrastructures India Ltd. v. Assistant Commissioner of Income Tax Cental Circle-28 Delhi & Ors., which had previously rejected a similar argument. The Court clarified that the Supreme Court's observations in Abhisar Buildwell were not a carte blanche to override the restrictions in Section 149. The liberty granted to the Revenue to initiate reassessment was subject to fulfilling the conditions laid down in Sections 147 and 148, and the powers were saved only if compliant with the Chapter pertaining to reassessment. The impugned notice was set aside. No issue was expressly left undecided.
The Delhi High Court allowed the petition and set aside all proceedings initiated pursuant to the impugned notice. The Court held that the notice dated 31.08.2022, issued under Section 148A(d) of the Income Tax Act, 1961, for Assessment Year 2014-15, was indeed beyond the period of limitation. The Court noted that the original period for issuing a notice under Section 148 expired on 31.03.2021, extended to 30.06.2021 by TOLA. Following the Supreme Court's decision in Union of India & Ors. v. Ashish Agarwal, the initial notice of 28.06.2021 was deemed a show cause notice under Section 148A(b). The Court applied the principle that the period from the issuance of the notice until 04.05.2022 (the date of the Ashish Agarwal decision), along with the time provided for the Assessee to respond, needed to be excluded. The AO had a limited window to issue the final notice, which expired on 16.06.2022. As the impugned notice was issued on 31.08.2022, it was beyond this permissible period. The Court relied on its own decision in Ram Balram Buildhome Pvt. Ltd. v. Income Tax Officer and Anr. to arrive at this conclusion. No issue was expressly left undecided.
The Court noted that an order dated 17.12.2024 under Section 127 of the Income Tax Act, 1961, had been passed, centralizing assessments and conferring jurisdiction on the AO. The Petitioner's name was listed at Serial No. 85 in this order. Consequently, the contention that the impugned orders were passed wholly without jurisdiction due to a lack of territorial jurisdiction was rendered moot. The Petitioner then sought to challenge the Section 127 order itself, arguing it was invalid because it assumed the Petitioner was located in Delhi and that no notice was issued before its passing. However, these grounds were not raised in the original petition. Considering that the Petitioner also sought to challenge the assessment order on merits, the Court deemed it inappropriate to entertain the writ petitions. The petitions were disposed of, leaving it open for the Petitioner to avail statutory remedies. The time for filing an appeal was extended by two weeks, with the concerned authority to consider it uninfluenced by delay. All rights and contentions of the parties were reserved.
The Delhi High Court allowed the petition and quashed the notice dated 21.07.2022 issued under Section 148 of the Income Tax Act, 1961, along with all consequential proceedings. The Court noted that the controversy was covered in favour of the petitioner by its own decision in Makemytrip India Pvt. Ltd. v. Deputy Commissioner of Income Tax Circle 16 (1) Delhi & Anr. (Neutral Citation No.: 2025:DHC:1892-DB). More importantly, the Court relied on the concession made by the Revenue before the Supreme Court in Union of India and Ors. v. Rajeev Bansal (2024 INSC 754). As per paragraph 19(f) of that decision, the Revenue conceded that for AY 2015-16, all notices issued on or after 1 April 2021 would have to be dropped as they would not fall for completion within the period prescribed under TOLA. The Court also referred to the Supreme Court's decision in Deepak Steel and Power Ltd. v. Central Board of Direct Taxes and Ors. (Civil Appeal No.5177/2025, decided on 02.04.2025), where the Supreme Court allowed appeals based on the same concession made in the Rajeev Bansal case. Therefore, the impugned notice, issued on 21.07.2022, which is after 1 April 2021, was set aside based on this concession.
The High Court held that the issue in the present case is covered by its earlier decisions in Dinesh Jindal, KAD Housing Private Limited, and Pankaj Jain. These decisions, particularly in light of the proviso to Section 149(1) and the principles laid down regarding the reckoning of limitation periods for reassessment proceedings initiated pursuant to a search conducted after 31.03.2021, establish that the impugned notice was barred by limitation. The Court noted that the block of ten assessment years is required to be reckoned from the end of AY 2025-26, which is the assessment year relevant to the financial year in which the impugned notice under Section 148 was issued. Consequently, AY 2015-16 falls outside this ten-year period. The Revenue's counsel concurred with this position. Therefore, the impugned notice was set aside as being barred by limitation. The petition was allowed, and the pending application was disposed of.
The Delhi High Court allowed the writ petition and set aside the impugned order dated 23.03.2025. The Court found that the issue involved in the present petition was squarely covered by the decision in Ram Balram Buildhome Pvt. Ltd. v. Income Tax Officer and Anr. The Court observed that the Assessing Officer had passed the order in complete disregard of the express directions issued by the court in Kanwaljeet Kaur v. Assistant Commissioner of Income Tax Circle (34) 1 Delhi & Ors. & other connected matters. The reasoning was that the AO was directed to evaluate reassessment notices in light of specific judgments, including Ram Balram Buildhome, which had settled issues of limitation. The AO's failure to adhere to these directions led to the setting aside of the order. The High Court also noted, prima facie, that the AO had wilfully disobeyed the court's directions, but refrained from initiating proceedings due to an unqualified apology tendered by the Revenue's counsel on behalf of the AO. The petition was disposed of in terms of the allowance and setting aside of the impugned order.
The Delhi High Court held that the notice dated 04.11.2022 issued under Section 148 of the Act for AY 2014-15 was beyond the period of limitation. The Court reasoned that the initial notice under Section 148, deemed to be under Section 148A(b) by virtue of the Supreme Court's decision in Union of India & Ors. v. Ashish Agarwal, was issued on the last day of the limitation period (30.06.2021). After considering the exclusions of time as per the fifth and third provisos to Section 149(1) of the Act, and the seven-day period available to the AO to issue a notice under Section 148 after the Assessee's reply as per the sixth proviso to Section 149(1) of the Act, the time for issuing such a notice expired on 13.06.2022. The impugned notice dated 04.11.2022 was issued thereafter. The Court noted that this controversy is covered in favour of the Assessee by its own decision in Ram Balram Buildhome Pvt. Ltd. v. Income Tax Officer and Anr. The petition was allowed, and all proceedings initiated pursuant to the impugned notice were set aside.
The Delhi High Court held that the impugned notice dated 30.08.2022 issued under Section 148 of the Income Tax Act, 1961, and all proceedings relating thereto are required to be quashed and set aside. The Court's decision was based on the concession made by the Revenue before the Supreme Court in the case of Union of India and Ors. v. Rajeev Bansal. Specifically, the Court referred to paragraph 19(f) of the Supreme Court's decision, wherein the Revenue conceded 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 during the period prescribed under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. The Court also noted a subsequent Supreme Court decision in Deepak Steel and Power Ltd. v. Central Board of Direct Taxes and Ors., which also allowed appeals based on this concession. Therefore, the controversy was covered in favour of the Assessee. The petition was allowed, and all proceedings initiated pursuant to the impugned notice were set aside.
The High Court held that the order passed under Section 148A(d) dated 29.07.2022 was beyond the period of limitation. The court noted that the original Section 148 notice was issued on 28.06.2021. Following the Supreme Court's directions in Union of India v. Ashish Agarwal, this was treated as a show cause notice under Section 148A(b). The petitioner's reply was filed on 08.06.2022. The fourth proviso to Section 149(1) granted seven days for the AO to pass an order under Section 148A(d), which expired on 16.06.2022. The order dated 29.07.2022 was therefore passed beyond this period. Additionally, the court held that the notice under Section 148 was invalid due to the lack of proper sanction under Section 151 of the Act. The court affirmed that the amended Section 151, as introduced by the Finance Act, 2021, would apply, and the sanction was not granted by the specified authority under Section 151(ii). Consequently, the order under Section 148A(d), the notice under Section 148, and the subsequent assessment order dated 23.05.2023 were quashed. The ratio is that reassessment proceedings initiated after 31.03.2021 must comply with the amended provisions of Section 148A and Section 151, and failure to do so renders the proceedings invalid.
The High Court admitted the appeal for hearing on two specific questions of law. These questions relate to whether the income is Fee for Technical Services (FTS) taxable under Section 9(1)(vii) and whether the ITAT erred in holding that services were jointly rendered leading to revenue sharing.
The High Court admitted the appeal for hearing on two specific questions of law. These questions pertain to the classification of income as FTS and the nature of service rendering and revenue sharing between the assessee and HCLT for foreign customers.
The High Court condoned the delay in filing the appeal. The Revenue's counsel submitted that the matter should be remanded to the Assessing Officer for determination of valuation using the correct method, which the ITAT had failed to direct.
The Delhi High Court admitted the Revenue's appeal on specific questions of law. These questions relate to whether income paid to foreign AEs is taxable in India and if the assessee was liable for TDS on such payments.
The High Court held that the issuance of a notice under Section 148 of the Income Tax Act, 1961, is governed by Section 149(1). For reassessment beyond three years from the end of the relevant assessment year, the conditions under Section 149(1)(b) must be satisfied, which requires the income escaping assessment to be ₹50 lakhs or more, represented in the form of an asset, expenditure in relation to a transaction/event/occasion, or entries in books of account. The Court noted that Section 149(1A) allows for the aggregation of escaped income across multiple previous years to meet the ₹50 lakh threshold, but this is contingent upon the income being represented by an 'asset' or 'expenditure in relation to an event or occasion'. The Court found that while the AO alleged that the escaped income across various years related to an 'event or occasion', there was no material on record to indicate a singular event or occasion to which the escaped income over several years related, nor was there any specific asset identified that represented the escaped income. The Court relied on its previous decision in M/s L-1 Identity Solutions Operating Company Private Limited v. Assistant Commissioner of Income Tax, Central Circle-25, which held that the ₹50 lakh threshold under Section 149(1)(b) must be reckoned in respect of the specified assessment year, unless the conditions of Section 149(1A) regarding 'asset' or 'expenditure in relation to an event or occasion' are met. Since these conditions were not met, the reassessment notice was deemed invalid. The petition was allowed, and the impugned orders and notices were set aside.
The High Court admitted the Revenue's appeal, framing specific questions of law regarding the taxability of payments to foreign associated enterprises and the assessee's liability to deduct tax at source. The matter is to be listed for hearing.
The High Court admitted the Revenue's appeal, framing specific questions of law concerning the taxability of payments to foreign associated enterprises and the assessee's liability for TDS. The case is listed for hearing along with a related appeal.
The Delhi High Court allowed the petition and set aside the impugned notice issued under Section 148 of the Income Tax Act, 1961, along with all consequential proceedings. The Court relied on its previous decisions in Ganesh Dass Khanna v. Income Tax Officer & Anr. and Twilight Infrastructure Pvt. Ltd. v. Income Tax Officer Ward 25 3 Delhi & Ors. The reasoning was that the approval for issuing the reassessment notice was granted by the Principal Commissioner of Income Tax (PCIT), whereas, for AY 2017-18, more than three years had elapsed from the end of the relevant assessment year. Consequently, the approval ought to have been obtained from the Principal Chief Commissioner of Income Tax (PCCIT) as per Section 151(ii) of the Act. The Court found that the issue of the competence of the specified authority to grant approval was intertwined with the limitation period. The judgment clarified that this order would not preclude the Revenue from initiating fresh proceedings in accordance with the law.
The High Court of Delhi condoned the delay of 8 days in filing the appeal and 117 days in refiling the appeal, finding the reasons stated in the applications to be sufficient. The Court also allowed the exemption application, subject to all just exceptions. The learned counsel for the respondent accepted notice of the appeal. The High Court has not decided on the merits of the appeal itself, as the matter was only listed for further hearing. The operative direction was to list the appeal for further proceedings on 28.04.2025. No issues regarding the substantive income tax law were decided.