RITU SAPRA V. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 43(1), DELHI & ANR.

W.P.(C)/6920/2023

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The case involves Ritu Sapra, the petitioner, who challenged several notices and an order related to reassessment for the assessment year 2014-15, issued by the Assistant Commissioner of Income Tax. The primary contention was that the notices were barred by limitation. The court examined the timeline of the notices and the applicable legal provisions, particularly focusing on the amendments and judicial interpretations concerning the issuance of notices under Sections 148 and 148A of the Income Tax Act. The court referenced several precedents, including the Supreme Court's decision in Union of India & Ors. v. Ashish Agarwal, which influenced the interpretation and application of the law in this case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 669980 (HC-DELHI)
• Appeal Type: High Court cases
• Pronouncement Date: 19-05-2025
• Assessment Year: misc
• Other Referred Cases: Mon Mohan Kohli v. Assistant Commissioner of Income Tax & Anr.: Neutral Citation No.: 2021:DHC:4181-DB, Union of India & Ors. v. Ashish Agarwal: (2023) 1 SCC 617, Union of India v. Rajeev Bansal: 2024 SCC OnLine SC 2693, Ram Balram Buildhome Pvt. Ltd. v. Income Tax Officer and Anr.: Neutral Citation No.: 2025:DHC:547-DB
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: SUNIL AGARWAL; SHIVANSH PANDYA; VIPLAV ACHARYA; PRIYA SARKAR; UTKARSH TIWARI
• Assessee Lawyers: SUMIT LALCHANDANI; ANANYA KAPOOR
• Keywords: Income Tax; Limitation; Notice; Reassessment
• Section: 148; 148A(b); 148A(d); 149(1)

Judgement Text

"$~107 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 6920/2023 and CM APPL. 26939/2023 RITU SAPRA .....Petitioner Through: Mr Sumit Lalchandani and Ms Ananya Kapoor, Advocates. versus ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 43(1), DELHI & ANR. .....Respondents Through: Mr Sunil Agarwal, Senior standing counsel with Mr Shivansh B. Pandya, Mr Viplav Acharya, Ms Priya Sarkar and Mr Utkarsh Tiwari, Advocates. CORAM: HON'BLE MR. JUSTICE VIBHU BAKHRU HON'BLE MR. JUSTICE TEJAS KARIA O R D E R % 19.05.2025 1. The petitioner has filed the above-captioned petition, inter alia, impugning an order dated 27.07.2022 [impugned order] passed under Section 148A(d) of the Income Tax Act, 1961 [the Act]; a notice dated 27.07.2022 [impugned notice] issued under Section 148 of the Act; a notice dated 20.05.2022 issued under Section 148A(b) of the Act; and the original notice issued under Section 148 dated 27.05.2021 in respect of assessment year [AY] 2014-15. 2. The learned counsel for the petitioner has confined its challenge to the impugned notice in the present petition on the ground that the same is barred by limitation. 3. The initial notice under Section 148 of the Act for AY 2014-15 was issued on 27.05.2021. The said notice was unsustainable as it was issued in 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 29/05/2025 at 12:57:42 accordance with the statutory regime regarding reassessment as in force prior to 31.03.2021. This Court in the case of Mon Mohan Kohli v. Assistant Commissioner of Income Tax & Anr.: Neutral Citation No.: 2021:DHC:4181-DB had set aside such notices that were issued after 31.03.2021 without following the procedure as prescribed under Section 148A of the Act. 4. However, the Supreme Court in the case of Union of India & Ors. v. Ashish Agarwal: (2023) 1 SCC 617, issued directions for considering the said notices as notices issued under Section 148A(b) of the Act, and granting time to the Assessing Officer [AO] to supply the material on the basis which such notices were premised. Therefore, in compliance with the directions issued by the Supreme Court in the case of Union of India & Ors. v. Ashish Agarwal (supra), the AO in the present case, provided information and material to the Assessee on 20.05.2022 and the Assessee was granted two weeks’ time to respond to the said notice. The said period expired on 03.06.2022. The Assessee responded to the said notice dated 20.05.2022 on 04.06.2022. 5. The AO passed an order under Section 148A(d) of the Act on 27.07.2022. According to the Assessee, the same was beyond the period as stipulated. 6. In the present case, the period of six years from the end of the assessment year available for issuing a notice under Section 148 of the Act expired on 31.03.2021. Thus, in terms of the first proviso to Section 149(1) of the Act, a notice under Section 148 of the Act could not be issued. However, the said period was extended by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 [TOLA]. 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 29/05/2025 at 12:57:42 Consequently, the time limit for issuing such a notice under Section 148 was extended to 30.06.2021. 7. The original notice under Section 148 of the Act was issued on 27.05.2021, which was thirty-four (34) days before the expiry of period of limitation. 8. As noted above, the said notice was deemed to be a notice under Section 148A(b) of the Act by virtue of the decision of Union of India & Ors. v. Ashish Agarwal (supra). The Supreme Court also granted further time to provide the material, which was required to accompany such a notice. As explained by the Supreme Court in the case of Union of India v. Rajeev Bansal: 2024 SCC OnLine SC 2693, the period from the date of the issuance of the notice till 04.05.2022, the date on which the Supreme Court had rendered the decision in Union of India & Ors. v. Ashish Agarwal (supra) is required to be excluded in terms of the fifth proviso to Section 149(1) of the Act. Additionally, the time provided till the date of providing the material, which should have accompanied a notice under Section 148A(b) of the Act, as well as the time available to the assessee to respond to the said notice was also required to be excluded by virtue of the third Proviso to Section 149(1) of the Act, as applicable at the material time. 9. Since the initial notice under Section 148 of the Act – subsequently construed as a notice under Section 148A(b) of the Act – was issued thirty- four (34) days before the expiry of period of limitation; there were thirty four days available for the AO to issue a notice under Section 148 of the Act after the expiry of time available to the petitioner to furnish its reply to the said notice. Therefore, the last day to issue notice was 04.07.2022; that is thirty four days from 03.06.2022. The impugned notice was issued on 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 29/05/2025 at 12:57:42 27.07.2022, which is after the period for issuing such a notice had expired. 10. Concededly, the controversy involved in the present case is covered by the decision of this Court in Ram Balram Buildhome Pvt. Ltd. v. Income Tax Officer and Anr.: Neutral Citation No.: 2025:DHC:547-DB. 11. In view of the above, the present petition is allowed. Consequently, any further proceedings undertaken by the Revenue pursuant to the notices as well as the re-assessment order passed under Section 147, are set aside. 12. It is material to note that the present petition was listed on 17.05.2023 and this Court had passed an order staying the operation of the impugned order and notices. However, this Court is informed that notwithstanding the stay order, an assessment order was passed. 13. Since the petitioner has prevailed in the present petition and the impugned order and the impugned notice have been set aside, the assessment order passed under Section 147 of the Act pursuant to the impugned notice, is also set aside. 14. The petition is allowed in the aforesaid terms. The pending application is also disposed of. 15. The hearing fixed before the Registrar on 30.10.2025 stands cancelled. VIBHU BAKHRU, J TEJAS KARIA, J MAY 19, 2025 RK 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 29/05/2025 at 12:57:42 "