First India Estates And Services Pvt. Ltd v. Income Tax Officer & Anr

$~98*IN THE HIGH COURT OF DELHI AT NEW DELHI+W.P.(C) 416/2023*IN THE HIGH COURT OF DELHI AT NEW DELHI+W.P.(C) 416/2023 FIRST INDIA ESTATES AND SERVICES PVT. LTD......PetitionerThrough:Ms. Kavita Jha, Sr. Adv. with Mr.Vaibhav Kulkarni, Mr. A. Bali & Mr.Himanshu Aggarwal, Advs.Through:Ms. Kavita Jha, Sr. Adv. with Mr.Vaibhav Kulkarni, Mr. A. Bali & Mr.Himanshu Aggarwal, Advs. Versus INCOME TAX OFFICER & ANR......RespondentsThrough:Mr. Debesh Panda, Ms. Zehra Khan,Mr. Vikramaditya, Ms. A. Shankar,Ms. Yashika & Ms. Delphina, Advs.Through:Mr. Debesh Panda, Ms. Zehra Khan,Mr. Vikramaditya, Ms. A. Shankar,Ms. Yashika & Ms. Delphina, Advs. CORAM:HON'BLE MR. JUSTICE VIBHU BAKHRUHON'BLE MR. JUSTICE TEJAS KARIA O R D E R%24.04.2025 1.The petitioner has filed the present petition, inter alia, praying asunder:under: “a)Issue writ of certiorari or writ, order or direction in thenature of certiorari, or any other appropriate writ, order ordirection under Article 226/227 of the Constitution ofIndia, quashing notice dated 20.05.2022 issued undersection 148A(b) of the Act.nature of certiorari, or any other appropriate writ, order ordirection under Article 226/227 of the Constitution ofIndia, quashing notice dated 20.05.2022 issued undersection 148A(b) of the Act. b)Issue writ of certiorari or writ, order or direction in thenature of certiorari, or any other appropriate writ, order ordirection under Article 226 / 227 of the Constitution ofIndia quashing impugned order dated 29.07.2022 passedunder section 148A(d) and consequential notice of evendate issued under section 148 of the Act, in the case of thepetitionerforassessmentyear2017-18,andanyconsequent proceedings thereto;”nature of certiorari, or any other appropriate writ, order ordirection under Article 226 / 227 of the Constitution ofIndia quashing impugned order dated 29.07.2022 passedunder section 148A(d) and consequential notice of evendate issued under section 148 of the Act, in the case of thepetitionerforassessmentyear2017-18,andanyconsequent proceedings thereto;” 2.The petitioner is a private limited company and is engaged in thebusiness of real estate. The petitioner filed its return for the assessment year 2017-18 on 31.10.2017 declaring an income of ₹5,95,980/-. The Assessing Officer issued a notice dated 21.06.2021 under Section 148 of the Income Tax Act, 1961 [Act] seeking to initiate the reassessmentproceedings in respect of AY 2017-18.The said notice was issued forreassessment under the provisions of the Act as were in force prior to31.03.2021. The said notice was challenged by the petitioner by filing a writpetition before this court [being W.P.(C) No.7596/2021], inter alia, for theaforesaid reason.The impugned notice was set aside by this court by anorder dated 16.12.2021 passed in a batch of matters with the lead matterbeing Mon Mohan Kohli v. Assistant Commissioner of Income Tax & Anr.:Neutral Citation No.: 2021:DHC:4181-DB. 3.Similar notices were also set aside by the various High Courts in India.The Revenue had assailed the orders passed by the High Courts before theSupreme Court in a batch of matters. In Union of India & Ors. v. AshishAgarwal: (2023) 1 SCC 617 and other connected appeals, the Supreme Courtissued directions under Article 142 of the Constitution of India directing thatsuch notices be construed as notices under Section 148A(b) of the Act with afurther direction to the AOs to provide the information as required to beaccompanied by the said orders. 4.In compliance of the directions issued by the Supreme Court in Unionof India & Ors. v. Ashish Agarwal (supra), the AO provided the informationto the petitioner on 20.05.2022 and the petitioner responded to the said noticeon 20.06.2022. 3.Similar notices were also set aside by the various High Courts in India.The Revenue had assailed the orders passed by the High Courts before theSupreme Court in a batch of matters. In Union of India & Ors. v. AshishAgarwal: (2023) 1 SCC 617 and other connected appeals, the Supreme Courtissued directions under Article 142 of the Constitution of India directing thatsuch notices be construed as notices under Section 148A(b) of the Act with afurther direction to the AOs to provide the information as required to beaccompanied by the said orders. 4.In compliance of the directions issued by the Supreme Court in Unionof India & Ors. v. Ashish Agarwal (supra), the AO provided the informationto the petitioner on 20.05.2022 and the petitioner responded to the said noticeon 20.06.2022. 5.Thereafter, the AO passed the order under Section 148A(d) of the Acton 29.07.2022 and issued the notice under Section 148 of the Act [theimpugned notice]. The AO had proceeded to issue notice after approval ofPrincipal Commissioner of Income Tax who is not the competentauthority to grant such approval. Concededly, the impugned notice was notissued with prior approval of the Principal Chief Commissioner of Income Tax as mandated under Section 151(ii) of the Act. 6.In Ganesh Dass Khanna v. Income Tax Officer & Anr.: NeutralCitation No.: 2023:DHC:8187-DB, this court considered the provisions ofSection 149 of the Act and held that, since the income that had escapedassessment was less than ₹50,00,000/-, the time limit prescribed under Section 149(1)(a) of the Act would be applicable, as the question concerningthe limitation and the competence of the specified authority to grant approvalwere intertwined. 7.In Twilight Infrastructure Pvt. Ltd. v. Income Tax Officer Ward 25 3Delhi & Ors.: Neutral Citation No.: 2024:DHC:259-DB, this court referredto the stand of the Revenue in Ganesh Dass Khanna v. Income Tax Officer& Anr. (supra) and held as under: “12.Clearly,therevenueadvancedtheargumentofinterlinkage between limitation and the ascertainment of thespecified authority due to the plain language of the amendedSection 151 of the Act. Section 151, when read alongside thefirst proviso to Section 148, brings the aspect of inextricablelinkage to the fore.12.1. Clauses (i) and (ii) of Section 151 of the amended Act(which has been extracted hereinabove) clearly specify theauthoritywhoseapprovalcantriggerthereassessmentproceedings. Thus, if three (3) years or less have elapsed fromthe end of the relevant AY, the specified authority who wouldgrant approval for initiation of reassessment proceedings willbe the Principal Commissioner or Principal Director orCommissioner or Director. However, if more than three (3)years from the end of the relevant AY have elapsed, thespecified authority for according approval for reassessmentshall be the Principal Chief Commissioner or PrincipalDirector General or, where there is no Principal ChiefCommissionerorPrincipalDirectorGeneral,ChiefCommissioner or Director General.********* 12.3. In these cases, there is no dispute that although three (3)years had elapsed from of the end of the relevant AY, theapproval was sought from authorities specified in clause (i), asagainst clause (ii) of Section 151.” 8.In view of the above, the impugned notice is liable to be set aside. 9.Concededly, the said issue is covered by the earlier decision of thiscourt in Abhinav Jindal HUF v. Income Tax Officer Ward 54(1) Delhi &Ors.: Neutral Citation No.:2024:DHC:7238-DB. 10.In view of the above, the petition is allowed and the impugned noticeissued under Section 148 of the Act is set aside. All proceedings initiatedpursuant to the impugned notice are also set aside. It is, however, clarifiedthat this order will not preclude the Revenue from initiating any furtherproceedings afresh albeit in accordance with law. 11.The petition is disposed of in the aforesaid terms. VIBHU BAKHRU, J TEJAS KARIA, J APRIL 24, 2025‘gsr’Click here to check corrigendum, if any