Ashish Girdhar v. Assistant Commissioner Of Incometax, Circle 22(2), Delhi & Anr

$~106 *IN THE HIGH COURT OF DELHI AT NEW DELHI+W.P.(C) 6565/2023 and CM APPL. 25727/2023 ASHISH GIRDHAR.....PetitionerThrough:MrSumitLalchandaniandMsAnanya Kapoor, Advocates. versus ASSISTANT COMMISSIONER OF INCOMETAX, CIRCLE 22(2), DELHI & ANR......RespondentsThrough: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 D E R % 19.05.2025 1.The petitioner has filed the above-captioned petition, inter alia,impugning an order dated 26.07.2022 passed under Section 148A(d) of theIncome Tax Act, 1961 [the Act] along with the notice dated 26.07.2022issued under Section 148; the notice dated 26.05.2022 under Section148A(b) and the original notice issued under Section 148 dated 29.06.2021[impugned notices and impugned orders] in respect of assessment year 2013-14. 2.The learned counsel for the petitioner has confined its challenge to thesaid notice in the present petition on the ground that the same are barred bylimitation. 3.The initial notice under Section 148 of the Act for AY 2013-14 wasissued on 29.06.2021. The said notice was unsustainable as it was issued in accordance with the statutory regime regarding reassessment in force priorto 31.03.2021. This Court in the case of Mon Mohan Kohli v. AssistantCommissionerofIncomeTax&Anr.:NeutralCitationNo.: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 the notices issued under Section 148A(b) of the Act andfurther granted time to the Assessing Officer to supply the material on 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 Assessing Officer in the present case providedinformation and material to the Assessee on 26.05.2022 and the Assesseewas granted two weeks’ time to respond to the said notice. The said periodexpired on 09.06.2022. The Assessee responded to the notice dated26.05.2022 on 28.05.2022 (which was filed on the portal on 31.05.2022). 5.The AO passed an order under Section 148A(d) of the Act on26.07.2022. 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 for issuing a notice under Section 148 of the Act expired on31.03.2020. Thus, in terms of Section 149 of the Act, a notice under Section148 of the Act could not be issued. However, the said period was extendedby the Taxation and Other Laws (Relaxation and Amendment of CertainProvisions) Act, 2020 . Consequently, the time limit for issuing such a notice was extended to 30.06.2021. 7.The original notice under section 148 of the Act was issued on29.06.2021, which was one day before the last day of expiry of period oflimitation. 5.The AO passed an order under Section 148A(d) of the Act on26.07.2022. 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 for issuing a notice under Section 148 of the Act expired on31.03.2020. Thus, in terms of Section 149 of the Act, a notice under Section148 of the Act could not be issued. However, the said period was extendedby the Taxation and Other Laws (Relaxation and Amendment of CertainProvisions) Act, 2020 . Consequently, the time limit for issuing such a notice was extended to 30.06.2021. 7.The original notice under section 148 of the Act was issued on29.06.2021, which was one day before the last day of expiry of period oflimitation. 8.As noted above, the said notice was deemed to be a notice underSection 148A(b) of the Act by virtue of the decision of the Supreme Court inUnion of India & Ors. v. Ashish Agarwal (supra). The Supreme Court alsogranted further time to provide the material, which was required toaccompany such a notice. As explained by the Supreme Court in the case ofUnion of India v. Rajeev Bansal: 2024 SCC OnLine SC 2693, the periodfrom the date of the issuance of the notice till 04.05.2022, the date on whichthe Supreme Court had rendered the decision in Union of India & Ors. v.Ashish Agarwal (supra) is required to be excluded in terms of the fifthproviso to Section 149(1) of the Act. Additionally, the time provided till thedate of providing the material, which should have accompanied a noticeunder Section 148A(b) of the Act, as well as the time available to theassessee to respond to the said notice was also required to be excluded byvirtue of the third Proviso to Section 149(1) of the Act, as applicable at thematerial time. 9.Since the initial notice under Section 148 of the Act –subsequentlyconstrued as a notice under Section 148A(b) of the Act – which was issuedone day before the last day of expiry of period of limitation; there was notime available for the AO to issue a notice under Section 148 of the Act afterthe petitioner had furnished its reply to the said notice. Thus in terms ofsixth proviso to Section 149(1) of the Act, the AO had seven days to issuethe notice under Section 148 of the Act, therefore the last day to issue notice was 16.06.2022; that is seven days from 09.06.2022. The impugned noticewas issued on 26.07.2022, which is after the period for issuing such a noticehad 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 notices have been set aside, the assessment order passedunder Section 147 of the Act pursuant to the impugned notice, is 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 TEJAS KARIA, J MAY 19, 2025RKClick here to check corrigendum, if any