WRIT PETITION 6920/2023

*IN THE HIGH COURT OF DELHI AT NEW DELHI+W.P.(C) 6920/2023 and CM APPL. 26939/2023RITU SAPRA.....PetitionerThrough:MrSumitLalchandaniandMsAnanya Kapoor, Advocates.

versus

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

.....Respondents

Through:Mr Sunil Agarwal, Senior standingcounsel with Mr Shivansh B. Pandya,Mr Viplav Acharya, Ms Priya Sarkarand Mr Utkarsh Tiwari, Advocates.

CORAM:HON'BLE MR. JUSTICE VIBHU BAKHRUHON'BLE MR. JUSTICE TEJAS KARIAO R R19.05.2025

1.The petitioner has filed the above-captioned petition, inter alia,impugning an order dated 27.07.2022 [impugned order] passed underSection 148A(d) of the Income Tax Act, 1961 [the Act]; notice dated27.07.2022 [impugned notice] issued under Section 148 of the Act; noticedated 20.05.2022 issued under Section 148A(b) of the Act; and the originalnotice issued under Section 148 dated 27.05.2021 in respect of assessmentyear [AY] 2014-15.

2.The learned counsel for the petitioner has confined its challenge to theimpugned notice in the present petition on the ground that the same is barredby limitation.

3.The initial notice under Section 148 of the Act for AY 2014-15 wasissued on 27.05.2021. The said notice was unsustainable as it was issued in

accordance with the statutory regime regarding reassessment as in forceprior 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 after31.03.2021 without following the procedure as prescribed under Section148A 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 thesaid notices as notices issued under Section 148A(b) of the Act, and grantingtime to the Assessing Officer [AO] to supply the material on the basis whichsuch notices were premised. Therefore, in compliance with the directionsissued by the Supreme Court in the case of Union of India & Ors. v. AshishAgarwal (supra), the AO in the present case, provided information andmaterial to the Assessee on 20.05.2022 and the Assessee was granted twoweeks’ time to respond to the said notice. The said period expired on03.06.2022. The Assessee responded to the said notice dated 20.05.2022 on04.06.2022.

5.The AO passed an order under Section 148A(d) of the Act on27.07.2022. According to the Assessee, the same was beyond the period asstipulated.

6.In the present case, the period of six years from the end of theassessment year available for issuing notice under Section 148 of the Actexpired on 31.03.2021. Thus, in terms of the first proviso to Section 149(1)of the Act, 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].

Consequently, the time limit for issuing such notice under Section 148 wasextended to 30.06.2021.

7.The original notice under Section 148 of the Act was issued on27.05.2021, which was thirty-four (34) days before the expiry of period oflimitation.

8.As noted above, the said notice was deemed to be notice underSection 148A(b) of the Act by virtue of the decision of Union of India &Ors. v. Ashish Agarwal (supra). The Supreme Court also granted furthertime to provide the material, which was required to accompany such anotice. 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 theissuance of the notice till 04.05.2022, the date on which the Supreme Courthad rendered the decision in Union of India & Ors. v. Ashish Agarwal(supra) is required to be excluded in terms of the fifth proviso to Section149(1) of the Act. Additionally, the time provided till the date of providingthe material, which should have accompanied notice under Section148A(b) of the Act, as well as the time available to the assessee to respondto the said notice was also required to be excluded by virtue of the thirdProviso to Section 149(1) of the Act, as applicable at the material time.

9.Since the initial notice under Section 148 of the Act – subsequentlyconstrued as notice under Section 148A(b) of the Act – was issued thirty-four (34) days before the expiry of period of limitation; there were thirtyfour days available for the AO to issue notice under Section 148 of the Actafter the expiry of time available to the petitioner to furnish its reply to thesaid notice. Therefore, the last day to issue notice was 04.07.2022; that isthirty four days from 03.06.2022. The impugned notice was issued on

27.07.2022, which is after the period for issuing such notice had expired.

10.Concededly, the controversy involved in the present case is coveredby the decision of this Court in Ram Balram Buildhome Pvt. Ltd. v. IncomeTax 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 noticesas 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 17.05.2023and this Court had passed an order staying the operation of the impugnedorder and notices. However, this Court is informed that notwithstanding thestay order, an assessment order was passed.

13.Since the petitioner has prevailed in the present petition and theimpugned order and the impugned notice have been set aside, theassessment order passed under Section 147 of the Act pursuant to theimpugned notice, is also set aside.

14.The petition is allowed in the aforesaid terms. The pendingapplication is also disposed of.

15.The hearing fixed before the Registrar on 30.10.2025 standscancelled.

VIBHU BAKHRU, J

MAY 19, 2025RK

TEJAS KARIA, J

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