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The High Court held that reassessment proceedings initiated under Section 148 of the Income Tax Act, 1961, cannot be sustained when a Resolution Plan under the IBC has been approved by the NCLT. The Court relied on the principles established in Ghanashyam Mishra & Sons (P) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd. and Essar Steel (India) Ltd. (CoC) v. Satish Kumar Gupta. These judgments emphasize that upon the approval of a Resolution Plan, the successful resolution applicant starts on a 'clean slate', meaning all claims pertaining to the period prior to the approval are frozen and extinguished. The legislative intent behind Section 31(1) of the IBC is to ensure that the resolution applicant is not burdened with unforeseen claims, making the plan workable. Therefore, any liabilities not specified or factored into the approved Resolution Plan, especially those relating to periods before its approval, cannot be pursued. The Court found itself unable to sustain the impugned reassessment actions.
The Delhi High Court disposed of the writ petition by directing the Jurisdictional Assessing Officer (AO) to evaluate the reassessment notice issued under Section 148 of the Income Tax Act, 1961. This evaluation must be conducted bearing in mind the Supreme Court's judgment in Union of India v. Rajeev Bansal and the High Court's own decision in Ram Balram Buildhome Pvt. Ltd. v. Income Tax Officer & Anr. The AO is required to examine the issue of the 'surviving period' for each individual noticee. The AO shall pass a reasoned and speaking order addressing the impact of these judgments on the impugned reassessment notice, determining whether it survives or is liable to be recalled. The decision in Kanwaljeet Kaur vs. Commissioner of Income Tax was followed, which also dealt with similar issues concerning Section 148 notices and the accordal of sanction under Section 151. Any adverse orders passed by the AO are open to challenge by the writ petitioner in accordance with law.
The Delhi High Court held that the sanction for reassessment action was not sustainable. The Court noted that for Assessment Year 2016-17, the notice under Section 148 was issued on 26.07.2022, meaning more than three years had elapsed from the end of the relevant assessment year. According to Section 151 of the Income Tax Act, 1961, as it stood at the relevant time, if more than three years have elapsed from the end of the relevant assessment year, the sanction must be by the Principal Chief Commissioner or Chief Commissioner. The Court found that the sanction was accorded by the PCIT, which was not the competent authority in this scenario. The Court clarified that the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act merely extended the period within which action could be initiated and did not alter the structure for approval and sanction as erected by Section 151. Therefore, the approval granted by the Joint Commissioner of Income-tax (as implied by the petitioner's argument and the reference to Abhinav Jindal HUF) was non-compliant with Section 151. The reassessment action was quashed on this ground alone. The order was without prejudice to the right of the respondent to draw such other proceedings as may be permissible in law.
The High Court of Delhi held that the present appeal, ITA 1130/2008, has become infructuous. This conclusion was reached because the Court was informed that the related quantum appeal, ITA 648/2007, which was the basis for entertaining the present appeal, had been dismissed on December 11, 2019, due to low tax effect. As the underlying quantum appeal is no longer pending, the present appeal has lost its purpose and relevance. The Court's reasoning is based on the procedural development that the appeal was entertained pending the outcome of another appeal, which has now been decided. The operative direction is that the appeal shall stand disposed of as infructuous.
The Delhi High Court allowed the writ petition, quashing the impugned order under Section 148A(d) and the notice under Section 148, both dated July 26, 2022. The Court found that the reassessment action could not be sustained on the short ground of invalid sanction. The Court reasoned that for reassessment initiated after the lapse of three years from the end of the relevant AY, the sanction must be obtained from the Principal Chief Commissioner, as per Section 151(ii) of the Income Tax Act, 1961. Since the notice for AY 2017-18 was issued on July 26, 2022, it was clearly after the three-year period. Therefore, the sanction accorded by the PCIT was not in compliance with the statutory requirement, rendering the reassessment action unsustainable. The Court relied on its previous decision in Abhinav Jindal HUF v. Commissioner of Income Tax and Ors. The operative direction was to quash the impugned order and notice, while preserving the right of the respondents to pursue other permissible proceedings in law.
The Delhi High Court disposed of the writ petition on terms identical to those provided in Paras 27 to 29 of its judgment in Kanwaljeet Kaur vs. Commissioner of Income Tax. Consequently, the concerned Assessing Officers (AOs) are directed to evaluate the individual show-cause notices (SCNs) under Section 148 of the Act. This evaluation must consider the High Court's judgments in T.K.S. Builders, Abhinav Jindal, and Naveen Kumar Gupta, which have settled issues regarding sanction under Section 151 and the jurisdictional AO's authority for reassessment, including the applicability of Section 153C in search cases. Furthermore, a similar exercise must be undertaken to examine the 'surviving period' of each notice under Section 148, guided by the Supreme Court's judgment in Rajeev Bansal and the High Court's judgment in Ram Balram. The AOs shall pass reasoned and speaking orders addressing the impact of these judgments on the impugned reassessment notices, determining whether they would survive or be recalled. Petitioners are at liberty to challenge any adverse orders.
The High Court admitted the appeal for hearing on specific questions of law. The court did not decide the merits of the case but framed the issues for determination.
The Delhi High Court disposed of the writ petition on terms identical to its previous judgment in Kanwaljeet Kaur vs. Commissioner of Income Tax. The Court directed the Assessing Officer (AO) to evaluate the individual show cause notices (SCNs) under Section 148 of the Income Tax Act, bearing in mind the judgments in T.K.S. Builders, Abhinav Jindal, and Naveen Kumar Gupta. These judgments settled issues concerning the accordal of sanction under Section 151 and the authority of the jurisdictional AO to commence reassessment, including the procedure under Section 153C in search cases. Furthermore, the AO must examine the issue of the 'surviving period' for each noticee under Section 148, guided by the judgments in Rajeev Bansal and Ram Balram Buildhome Pvt. Ltd. The AO is to pass a reasoned and speaking order addressing the impact of these judgments on the impugned reassessment notices, determining whether they would survive or be recalled. Any adverse orders can be assailed by the petitioner in accordance with law. The Court expressly left undecided the specific findings on the validity of the notices and the reassessment proceedings, deferring this to the AO's evaluation.
The Delhi High Court allowed the writ petition, quashing the impugned order under Section 148A(d) and the notice under Section 148, both dated 29 July 2022. The Court held that the sanction for reassessment, which was initiated after the expiry of three years from the end of AY 2016-17, was not granted by the competent authority. According to Section 151 of the Income Tax Act, 1961, where more than three years have elapsed from the end of the relevant assessment year, the sanction must be obtained from the Principal Chief Commissioner or Chief Commissioner. The sanction in this case was granted by the Principal Commissioner of Income Tax, which was not the prescribed authority for actions initiated after the three-year period. The Court emphasized that the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, merely extended the period within which action could be initiated but did not alter the structure for approval and sanction as established by Section 151. Therefore, the reassessment action could not be sustained on this ground alone. The order was made without prejudice to the right of the respondent to initiate other permissible proceedings.
The Delhi High Court disposed of the writ petition by directing the Jurisdictional Assessing Officer (AO) to evaluate the individual show-cause notices (SCNs) under Section 148A of the Income Tax Act, 1961. The AO is to consider the impact of the judgments in T.K.S. Builders, Abhinav Jindal, and Naveen Kumar Gupta, which have settled issues concerning the accordal of sanction under Section 151 and the authority of the AO to commence reassessment. Furthermore, the AO must examine the issue of the 'surviving period' for each noticee under Section 148, guided by the Supreme Court's decision in Union of India v. Rajeev Bansal and this Court's ruling in Ram Balram Buildhome Pvt. Ltd. v. Income Tax Officer & Anr. The AO is to pass a reasoned and speaking order addressing the impact of these judgments on the impugned reassessment notices, determining whether they should survive or be recalled. The petitioner is at liberty to challenge any adverse order passed subsequently. The Court explicitly left undecided the ultimate fate of the reassessment notices, deferring this to the AO's evaluation.
The High Court held that the appellate authorities (CIT(A) and ITAT) had concurrently found that the assessee had discharged its onus under Section 68 by proving the identity, creditworthiness, and genuineness of the shareholders. The court found no substantial question of law arising from the ITAT's decision.
The Delhi High Court disposed of the writ petition on terms identical to those provided in paragraphs 27 to 29 of its judgment in Kanwaljeet Kaur vs. Commissioner of Income Tax. The Court directed the concerned Assessing Officers (AOs) to evaluate the individual show-cause notices (SCNs) under Section 148 of the Income Tax Act, 1961, bearing in mind the judgments in T.K.S. Builders, Abhinav Jindal, and Naveen Kumar Gupta, which have settled issues pertaining to the accordal of sanction under Section 151 and the authority of the AO to commence reassessment. Furthermore, the AOs are to undertake an exercise to examine the issue of surviving period for each individual noticee under Section 148, guided by the judgments in Rajeev Bansal and Ram Balram Buildhome Pvt. Ltd. v. Income Tax Officer & Anr. The AOs shall consequently pass a reasoned and speaking order dealing with the impact of these judgments on the impugned reassessment notices, determining whether they would survive or be liable to be recalled. It will be open to the petitioner to assail any adverse orders passed pursuant to this direction. The court expressly left undecided the ultimate fate of the reassessment proceedings, deferring it to the AO's reasoned order.
The Delhi High Court held that the Tribunal failed to consider that the assessee must prove not only the identity of the investor but also their creditworthiness and the genuineness of the transaction. The mere identity of the investor is insufficient to discharge the onus.
The High Court held that the appellate authorities (CIT(A) and ITAT) had concurrently found that the assessee had discharged its onus under Section 68 by proving the identity, creditworthiness, and genuineness of the shareholders. The court found no substantial question of law arising from the ITAT's decision.
The Delhi High Court held that the Tribunal failed to consider that the assessee must prove not only the identity of the investor but also their creditworthiness and the genuineness of the transaction. The mere identity of the investor is insufficient to discharge the onus.
The Delhi High Court disposed of the writ petition on terms identical to those provided in paragraphs 27 to 29 of its judgment in Kanwaljeet Kaur vs. Commissioner of Income Tax [2025 SCC OnLine Del 605]. The Court directed the Jurisdictional Assessing Officer (AO) to evaluate the reassessment notices under Section 148 of the Income Tax Act, 1961, bearing in mind the judgments in T.K.S. Builders, Abhinav Jindal, and Naveen Kumar Gupta, which settled issues pertaining to sanction under Section 151 and the authority of the AO to commence reassessment. Crucially, the AO was also directed to examine the issue of the 'surviving period' for each noticee under Section 148, guided by the judgments in Union of India v. Rajeev Bansal [2024 SCC OnLine SC 2693] and Ram Balram Buildhome Pvt. Ltd. v. Income Tax Officer & Anr. [2025 SCC OnLine Del 481]. The AO is to pass a reasoned and speaking order addressing the impact of these judgments on the impugned reassessment notices, determining whether they would survive or be liable to be recalled. The petitioner retains the liberty to challenge any adverse orders.
The Delhi High Court held that the controversy in the present petition was covered by its prior decision in ARN Infrastructures India Ltd. The Court found the contention that the time-period stipulated under Section 149 of the Act is not applicable in the given facts to be erroneous and rejected it. The Court relied on the reasoning in ARN Infrastructures India Ltd., which emphasized that the liberty granted to the Revenue to initiate reassessment under Sections 147/148 is subject to fulfilling the conditions prescribed in those sections, including those in Section 149, and cannot override statutory restrictions. Consequently, the impugned notice was set aside. The petition was allowed, and pending applications were disposed of.
The Delhi High Court allowed the petition and set aside the impugned notice. The Court found that the controversy was covered by its previous decision in ARN Infrastructures India Ltd. The Court reiterated the principle that while the Supreme Court in Abhisar Buildwell acknowledged the Revenue's right to reassess, this power is strictly subject to the fulfillment of conditions stipulated in Sections 147 and 148 of the Act, and importantly, the limitations prescribed under Section 149 of the Act. The Court rejected the contention that the time-period stipulated under Section 149 of the Act is not applicable, finding it erroneous in the given facts. The ratio decidendi is that the Revenue's power to initiate reassessment is not a carte blanche and must adhere to all statutory prescriptions, including time limitations.
The Delhi High Court held that the controversy in the present petition was covered by its previous decision in ARN Infrastructures India Ltd. v. Assistant Commissioner of Income Tax Central Circle-28 Delhi & Ors. The Court reiterated that the liberty granted to the Revenue to initiate reassessment proceedings is subject to compliance with the statutory prescriptions, including the restrictions under Section 149 of the Act. The contention that the time-period stipulated under Section 149 is not applicable was rejected as erroneous. Consequently, the impugned notice dated 31.08.2024 was set aside. The operative direction was to allow the petition and set aside the notice.
The High Court held that it would not be justified or appropriate to entertain the writ challenge at this stage, as it would pre-empt the view of the appellate authority. The Court noted that an identical issue was already before the Income Tax Appellate Tribunal and that no sustainable jurisdictional challenge had been raised. Therefore, the High Court declined to interdict the process or render its own opinion on the merits of the additions, which could impact the pending appeal. The Court clarified that issues related to the stay of demand and deposits during the pendency of the appellate remedy are separate and can be canvassed independently if the petitioner is aggrieved by any order on such applications. The writ petition was dismissed, keeping all questions on merits open.
The Delhi High Court held that the substantial questions of law raised in the present appeal were no longer res integra, having been decided by a co-ordinate bench of the same court in the case of Cairn UK Holdings Ltd. vs. Director of Income-tax (2013) 38 taxmann.com 179 (Delhi). The revenue's counsel conceded that based on this precedent, no substantial question of law arises for consideration in the current appeal. Consequently, the Court found the appeal to be unmerited. The ratio decidendi is that where a substantial question of law has been authoritatively decided by a co-ordinate bench, subsequent appeals raising identical questions are likely to be dismissed on the same grounds, without re-adjudication. The appeal was dismissed, and pending applications were also disposed of.
The High Court held that the Central Administrative Tribunal (CAT) was correct in disposing of the Original Application (OA) as the petitioner's grievance had been redressed by his subsequent promotion to the post of Principal Commissioner of Income Tax. The Court found the petitioner's insistence on a declaration regarding the illegality of the respondents' actions in not promoting him earlier and in processing his case through the Appointments Committee of Cabinet (ACC) to be misconceived. The Court reasoned that as the petitioner was a beneficiary of the promotion, which was indeed processed through the ACC, he could not logically challenge that very process. To do so would require him to forego his promotion. The Court viewed the petitioner's pursuit of this declaration as an 'ego issue' rather than a substantive claim, especially after he had given up claims for costs and interest. Therefore, the High Court agreed with the CAT that nothing survived for consideration in the OA and dismissed the writ petition as completely misconceived. No issue was expressly left undecided.
The High Court held that the AO's formation of opinion was demonstrative of due application of mind and not 'borrowed satisfaction'. The approval granted by the PCIT was also found to be compliant with Section 151.
The Delhi High Court held that Ms. Seema Verma did not have a 'substantial interest' in the assessee company as per the definition in Section 40A(2)(b) of the Act, as her equity holding alone did not equate to voting power or profit share. Therefore, the disallowance under Section 40A(2)(b) was not justified.
The High Court held that the ITAT exceeded its jurisdiction by recalling its earlier order and undertaking a merit review, as it lacked statutory power for such a review. The Tribunal's power is limited to procedural review, not a review on merits.
The High Court dismissed the writ petition. The Court found that while the initial notice dated 31 March 2021 was indeed issued in the name of a deceased assessee, the respondents subsequently undertook a course correction. They issued a fresh notice on 21 March 2022 under Section 148A(b), which was addressed to the late Angoori Devi Gupta 'Through legal heir and Son Sh. S.K Gupta'. This subsequent notice was approved by the Principal Chief Commissioner of Income Tax, thereby complying with the mandate of Section 151 of the Act. The Court held that the notice of 21 March 2022 could not be construed as a continuation of the original Section 148 notice, as the latter was considered non est by the petitioner's own submission. Since these were the only grounds pressed before the Court, and the subsequent proceedings were found to be in order, the challenge was dismissed.
The High Court disposed of the writ petition by directing the Jurisdictional Assessing Officer (AO) to evaluate the reassessment notice under Section 148 of the Income Tax Act, 1961. This evaluation must consider the issue of the 'surviving period' in light of the Supreme Court's judgment in Union of India v. Rajeev Bansal and the High Court's judgment in Ram Balram Buildhome Pvt. Ltd. v. Income Tax Officer & Anr. The AO is required to pass a reasoned and speaking order addressing the impact of these judgments on the impugned reassessment notice, determining whether it would survive or be liable to be recalled. The petitioner retains the liberty to challenge any adverse order passed by the AO. The Court also referenced its prior judgment in Kanwaljeet Kaur vs. Commissioner of Income Tax, which dealt with similar issues concerning sanction under Section 151 and the authority of the AO to commence reassessment, as well as the applicability of Section 153C in search cases.
The Delhi High Court held that the notice dated February 6, 2024, issued under Section 148 of the Income Tax Act, 1961, for reassessment of the petitioner for AY 2014-15, was unsustainable. The court reasoned that for reassessments pertaining to AYs prior to April 1, 2021, the action must comply with the timeframes specified under Section 149(1)(b), Section 153A, or Section 153C, as they existed before the Finance Act, 2021. The court applied its previous decisions in Filatex India Ltd., Flowmore Limited, and Principal Commissioner of Income Tax-1 vs. Ojjus Medicare Pvt. Ltd. It was established that in cases of search under Section 132 or requisition under Section 132A, and subsequent proceedings under Section 153C, the reckoning of the ten-year block period for reassessment is from the date of receipt of books of account or documents by the jurisdictional Assessing Officer. The court provided a computation showing that AY 2014-15 falls beyond the ten-year block period when reckoned from the date of the impugned Section 148 notice dated February 6, 2024. Consequently, the writ petition was allowed, and the impugned notice was quashed.
The Delhi High Court disposed of the writ petition on terms identical to its judgment in Kanwaljeet Kaur vs. Commissioner of Income Tax. The Court directed the concerned Assessing Officers (AOs) to evaluate the reassessment notices, bearing in mind specific judgments. For the issue of surviving period, the AOs are to consider the Supreme Court's decision in Union of India v. Rajeev Bansal and the High Court's decision in Ram Balram Buildhome Pvt. Ltd. v. Income Tax Officer & Anr. The AOs must pass a reasoned and speaking order addressing the impact of these judgments on the impugned reassessment notices, determining whether they survive or are liable to be recalled. This exercise will involve examining the validity of the sanction under Section 151 and the authority of the AO to commence reassessment. The petitioner will have the liberty to assail any adverse orders in accordance with law. The Court expressly left undecided the specific findings on the merits of the reassessment, remitting the matter for proper adjudication by the AO.
The High Court held that while the notice under Section 148, issued based on information collected under Section 135A, was not rendered invalid due to the inadvertent mistake of annexing information pertaining to another assessee, the impugned order dated February 3, 2025, disposing of the petitioner's objections, was unsustainable. The Court found that the authority passing the order had overlooked the error apparent on the face of the record and did not apply its mind to the petitioner's objections. Section 292B of the Act was considered, which saves proceedings from invalidity due to minor mistakes or defects if they are in substance and effect in conformity with the Act's intent. However, this provision did not save the impugned order. The Court quashed the impugned order and directed the respondents to rectify the notice by providing the correct information from the Insight Portal and the approval accorded by the Specified Authority, along with relevant details, within one week. The petitioner would then be allowed to file his reply/objections, which would be considered in accordance with law. The Court distinguished the judgments relied upon by the revenue, stating they were applicable to cases involving Section 148A, whereas the present case was initiated under Section 135A.
The Delhi High Court disposed of the writ petition on terms identical to its judgment in Kanwaljeet Kaur vs. Commissioner of Income Tax [2025 SCC OnLine Del 605]. The Court directed the concerned Assessing Officers (AOs) to evaluate the individual show-cause notices (SCNs) under Section 148A of the Income Tax Act, 1961, bearing in mind the Court's previous judgments in T.K.S. Builders, Abhinav Jindal, and Naveen Kumar Gupta, which have settled issues concerning the accordal of sanction under Section 151 and the authority of the jurisdictional AO to commence reassessment. The AOs are also to examine the issue of the surviving period for each noticee under Section 148, guided by the judgments in Union of India v. Rajeev Bansal [2024 SCC OnLine SC 2693] and Ram Balram Buildhome Pvt. Ltd. v. Income Tax Officer & Anr. [2025 SCC OnLine Del 481]. Consequently, the AOs shall pass a reasoned and speaking order addressing the impact of these judgments on the impugned reassessment notices, determining whether they would survive or be liable to be recalled. Petitioners retain the liberty to challenge any adverse orders in accordance with law. The Court expressly left undecided the merits of the petitioner's claims, remitting them for adjudication by the AO.
The High Court dismissed the review petitions, stating there was no apparent error in its previous order. It reiterated that if the Tribunal failed to record a contention, the remedy lies elsewhere, and the appellant had not availed such a remedy.
The Delhi High Court held that the impugned notice dated 31.08.2024, issued under Section 148 of the Income Tax Act, 1961, for AY 2015-16, is barred by limitation. The Court found that the period of six years from the end of the relevant assessment year (AY 2015-16) expired on 31.03.2022. As the impugned notice was issued after this date, it was consequently barred. The Court's reasoning was based on the submissions made by the petitioner, which were supported by the decisions in Manju Somani and Union of India v. Rajeev Bansal, particularly the interpretation of the time limits for issuing notices under the old regime as applied to the new regime. The Court accepted the concurrence of the respondent's counsel on this point. The impugned notice was set aside, and the petition was allowed in these terms. No other issue was expressly left undecided.
The High Court held that the bad debt was not allowable as a deduction because the assessee was not in the business of lending or standing surety, and the debt was not taken into account in computing the income of the assessee. The court relied on Supreme Court precedents regarding the conditions for allowing bad debt deductions.
The High Court condoned the delay of 311 days in re-filing the appeal by the Revenue. The Court considered the averments made in the application for condonation of delay and found them sufficient to allow the application. The application for condonation of delay was disposed of. The appeal itself was then listed for further hearing on a future date, indicating that the merits of the appeal have not yet been decided. No finding was reached on any substantive issue of the appeal.
The High Court found no apparent error in its previous order dismissing the appeals. It reiterated that if the Tribunal failed to record a contention that was addressed, the remedy lies elsewhere, not in a review petition.
The Delhi High Court allowed the writ petition, quashing the order passed under Section 148A(d) and the notice issued under Section 148, both dated May 30, 2022. The Court held that for reassessment proceedings initiated after the lapse of three years from the end of the relevant assessment year, the sanction must be obtained from the Principal Chief Commissioner, as stipulated by Section 151 of the Income Tax Act, 1961. The Court found that the sanction accorded by the Principal Commissioner of Income Tax was not sustainable in this case. The Court clarified that the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, merely extended the period within which action could be initiated but did not alter the structure for approval and sanction as established by Section 151. The judgment emphasized that the bifurcation of powers for approval among specified authorities based on the lapse of time from the end of the relevant assessment year remained unaffected. The reassessment action was therefore quashed on this short ground alone. The order was made without prejudice to the right of the respondent to initiate other permissible proceedings.
The Delhi High Court held that the controversy in the present petition was covered by its decision in ARN Infrastructures India Ltd. v. Assistant Commissioner of Income Tax Central Circle-28 Delhi & Ors. The Court reiterated the principles from the ARN Infrastructures judgment, which interpreted the Supreme Court's observations in Abhisar Buildwell. The High Court emphasized that the liberty granted to the Revenue to initiate reassessment is subject to the fulfillment of conditions stipulated in Sections 147 and 148 of the Act, and cannot override the restrictions in Section 149 of the Act. The Court found the petitioner's contention that the time period stipulated under Section 149 of the Act is not applicable to be erroneous. Consequently, the impugned notice was set aside. The petition was allowed, and the pending application was disposed of.
The Delhi High Court held that the controversy in the present petition was covered by its decision in ARN Infrastructures India Ltd. (supra). The Court reiterated the principle from ARN Infrastructures India Ltd., which, in turn, relied on the Supreme Court's observations in Abhisar Buildwell. The Court emphasized that while the Supreme Court acknowledged the Revenue's right to initiate reassessment proceedings even after annulment of search assessments, this power is strictly subject to the fulfillment of conditions laid down in Sections 147 and 148 of the Act. Crucially, the Court clarified that these observations do not grant a carte blanche to the Revenue to override the restrictions imposed by Section 149 of the Act. The contention that the time-period stipulated under Section 149 of the Act is not applicable was rejected as erroneous. Consequently, the impugned notice was set aside.
The Delhi High Court held that the controversy in the present petition was covered by its prior decision in ARN Infrastructures India Ltd. v. Assistant Commissioner of Income Tax Central Circle-28 Delhi & Ors. The Court reiterated the principles from the ARN Infrastructures judgment, which itself relied on Supreme Court observations in Abhisar Buildwell. These principles state that while the Revenue has a remedy of reassessment under Sections 147/148, this power is subject to fulfilling the conditions stipulated in those sections, including those in Section 149. The Court explicitly rejected the contention that the time period stipulated under Section 149 of the Act is not applicable in the given facts. Consequently, the impugned notice was set aside. The petition was allowed, and the pending application was disposed of.
The High Court allowed the writ petitions and quashed the impugned reassessment orders. The Court held that the reassessment action was unsustainable because the Assessing Officer (AO) relied solely on the survey conducted on June 6-7, 2019, to form the belief that income had escaped assessment for the assessment years 2013-14 to 2017-18. The Court emphasized that the existence of a Permanent Establishment (PE) is a fact-specific issue that must be determined for each particular tax period. The judgment cited Supreme Court decisions in CIT v Central and CIT v Gupta Abhushan (P) Ltd, which held that findings from a survey or assessment in one year cannot be blindly applied or extrapolated to independent assessment years without establishing identical facts. The Court noted that the AO had not recorded any finding or conclusion that the facts prevailing in AYs 2013-14 to 2017-18 were identical to those found in the 2019 survey. Therefore, the AO's belief that income had escaped assessment was based on suspicion rather than a reasoned belief derived from independent inquiry for each relevant year. The ratio is that reassessment based on a survey in one period cannot be extended to other periods without establishing continuity of facts.
The Delhi High Court held that the controversy in the present petition was covered by its decision in ARN Infrastructures India Ltd. The Court rejected the contention that the time period stipulated under Section 149 of the Act was not applicable in the given facts. The reasoning relied on the ARN Infrastructures judgment, which clarified that while the Supreme Court in Abhisar Buildwell saved the Revenue's remedy of reassessment in certain situations (like annulment of search assessments), this power is strictly subject to fulfilling the conditions prescribed in Sections 147 and 148, and importantly, Section 149 of the Act. The Court found the petitioner's argument regarding the inapplicability of Section 149 to be erroneous. Consequently, the petition was allowed, and the impugned notice was set aside. The pending application was also disposed of.
The Delhi High Court allowed the petition and set aside the impugned notice. The Court relied on its previous decision in ARN Infrastructures India Ltd. v. Assistant Commissioner of Income Tax Central Circle-28 Delhi & Ors. The Court reiterated that while the Supreme Court in Abhisar Buildwell acknowledged the Revenue's right to reassess in certain situations (like when search assessments are annulled), this power is strictly subject to the fulfillment of conditions stipulated in Sections 147 and 148 of the Act. The Court emphasized that the Supreme Court's observations do not grant a carte blanche to override the restrictions, particularly those found in Section 149 of the Act concerning the time limits for reassessment. The contention that the time period stipulated under Section 149 of the Act is not applicable was rejected as erroneous. Consequently, the impugned notice was quashed.
The Delhi High Court held that the controversy in the present petition is covered by its previous decision in ARN Infrastructures India Ltd. v. Assistant Commissioner of Income Tax Central Circle-28 Delhi & Ors. The Court reiterated the principle from ARN Infrastructures that while the Supreme Court in Abhisar Buildwell acknowledged the Revenue's right to reassess when search assessments are annulled, this power is strictly subject to the fulfillment of conditions stipulated in Sections 147 and 148 of the Act. Crucially, the Court emphasized that these observations do not grant a carte blanche to the Revenue to override the restrictions, particularly those appearing in Section 149 of the Act. The contention that the time period stipulated under Section 149 is not applicable in the given facts was found to be erroneous and was rejected. Consequently, the impugned notice was set aside.
The High Court held that the appeal filed by the Revenue was not maintainable due to low tax effect. The Revenue's counsel themselves submitted that the tax effect involved was below the threshold limit of ₹2,00,00,000/- as per the Circular dated 17.09.2024 and did not fall within any of the exceptions. Based on this submission, the Court found no reason to proceed with the merits of the appeal. The ratio decidendi is that appeals with a tax effect below the prescribed monetary limits, without falling under any exceptions, are liable to be dismissed. The operative direction was the dismissal of the appeal.
The Delhi High Court held that the controversy in the present petition is covered by its prior decision in ARN Infrastructures India Ltd. v. Assistant Commissioner of Income Tax Central Circle-28 Delhi & Ors. The Court reiterated the principle from the ARN case, which interpreted the Supreme Court's observations in Abhisar Buildwell. It clarified that while the Revenue has a remedy of reassessment when search assessments are annulled, this power is not a carte blanche and must be exercised strictly in accordance with the conditions stipulated in Sections 147 and 148 of the Act, including the limitations imposed by Section 149. The Court found the petitioner's contention that the time-period under Section 149 is not applicable to be erroneous. Consequently, the petition was allowed, and the impugned notice was set aside. The pending application was also disposed of.
The Delhi High Court allowed the petition and set aside the impugned notice. The Court referred to its previous decision in ARN Infrastructures India Ltd. v. Assistant Commissioner of Income Tax Central Circle-28 Delhi & Ors. This judgment had clarified that while the Supreme Court in Abhisar Buildwell had observed that reassessment is a remedy available to the revenue when search assessments are annulled, this power is strictly subject to the fulfillment of conditions mentioned in Sections 147 and 148 of the Act. The Court emphasized that these observations do not grant a carte blanche to the revenue to override the restrictions, particularly those in Section 149 of the Act. The High Court found that the contention that the time-period under Section 149 is not applicable was erroneous. The revenue's concurrence with this view led to the quashing of the notice.
The Delhi High Court held that the controversy in the present petition is covered by its previous decision in ARN Infrastructures India Ltd. v. Assistant Commissioner of Income Tax Central Circle-28 Delhi & Ors. The Court reiterated the principle from the ARN Infrastructures case, which, referencing the Supreme Court's decision in Abhisar Buildwell, clarified that while the Revenue can resort to reassessment under Sections 147/148 when search assessments are annulled, this power is strictly subject to fulfilling the conditions stipulated in Sections 147 and 148, and importantly, Section 149 of the Act. The Court rejected the contention that the time-period stipulated under Section 149 is not applicable in the given facts. Consequently, the petition was allowed, and the impugned notice was set aside. The pending application was also disposed of.
The Delhi High Court held that the controversy in the present petition is covered by its decision in ARN Infrastructures India Ltd. The Court reiterated that the liberty granted to the Revenue to initiate reassessment is subject to fulfillment of conditions under Sections 147/148 and cannot override the restrictions in Section 149. The Court found the contention that the time period stipulated under Section 149 is not applicable to be erroneous. Consequently, the petition was allowed, and the impugned notice was set aside. The operative direction was the setting aside of the notice. No issue was expressly left undecided.
The Delhi High Court allowed the writ petition and quashed the impugned order under Section 148A(d) and the notice under Section 148, both dated July 30, 2022. The Court held that the Taxation & Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) provisions have no bearing on the identification of the competent authority under Section 151 for according sanction. The Court reiterated its previous ruling in Abhinav Jindal HUF v. Commissioner of Income Tax and Ors, stating that TOLA merely extends the period within which action can be initiated and does not alter the structure for approval and sanction established by Section 151. Since, in this case, the sanction was undisputedly accorded only by the PCIT, and the reassessment action was commenced after a lapse of three years from the end of the relevant AY, the reassessment action could not be sustained. The Court found itself unable to sustain the grant of approval by the PCIT and consequently quashed the impugned notices.