Mansi Aggarwal v. Income Tax Officer Ward 62(1), Delhi & Anr

$~56 IN THE HIGH COURT OF DELHI AT NEW DELHI +W.P.(C)16144/2024,CMAPPL.67868/2024&CMAPPL.67869/202467869/2024 MANSI AGGARWAL .....Petitioner Through:Mr Abhishek Garg with Mr YashGaiha, Mr Ranesh Singh Mankotiaand Mr Naman Mehta, Advocates.Gaiha, Mr Ranesh Singh Mankotiaand Mr Naman Mehta, Advocates. versus INCOME TAX OFFICER WARD 62(1), DELHI & ANR. .....RespondentsThrough:Mr Debesh Panda with Ms ZehraKhan, Mr Vikramaditya Singh andMr Ishan Puri, Advocates. CORAM: HON'BLE MR. JUSTICE VIBHU BAKHRUHON'BLE MS. JUSTICE SWARANA KANTA SHARMA O R D E R%21.11.2024 1.Issue notice. 2.The learned counsel for the respondents accepts notice. 3.With the consent of the learned counsel for the parties, the petition isheard at the threshold stage of admission.heard at the threshold stage of admission. 4.The petitioner has filed the present petition, inter alia, praying as under: “A. Issue a writ in the nature of certiorari/mandamus or any otherappropriate writ, order or direction for quashing:appropriate writ, order or direction for quashing: a) The Impugned Notice dated 13.07.2023 issued under Section 148of the Act;of the Act; b) The Impugned Order dated 13.07.2023 issued under Section148A(d) of the Act; c) The Impugned Show Cause Notice dated 09.06.2023 issuedunder Section 148A(b) of the Act; In the case of the Petitioner for assessment year 2015-16 and allproceedings/actions consequent thereto; B. Grant ad-interim stay on the reassessment proceedings initiatedunder Sections 147/148 of the Act vide the Impugned Notice dated13.07.2023 issued under Section 148 of the Act, and/or any otherproceedings initiated thereunder for the assessment year 2015-16,during the pendency of the present petition. C. Restrain the Respondents to initiate any further proceedingsemanating from the Impugned Order dated 13.07.2023 and theImpugned Notice dated 13.07.2023.” 5.It is the petitioner’s case that the notice dated 09.06.2023 (hereafterthe impugned notice dated 09.06.2023) issued under Section 148A(b) of theIncome Tax Act, 1961 (hereafter the Act) and the notice dated 13.07.2023(hereafter the impugned notice dated 13.07.2023) under Section 148 of theAct are now barred by limitation. It is further contended that in any eventthe time period for reopening of the assessment under Section 147 of the Acthas now expired, and therefore, no proceedings pursuant to the impugnednotice dated 13.07.2023 issued under Section 148 of the Act can becontinued. 6.The petitioner had filed its return of income for the Assessment Year(AY) 2015-16 on 30.03.2016. The Assessing Officer (AO) sought to reopenthe assessment and accordingly, issued a notice dated 31.03.2021 underSection 148 of the Act, which was received by the petitioner on 01.04.2021.In the meanwhile, the provisions of the Finance Act, 2021 which broughtabout substantial changes in the procedure for reopening of the assessments – came into force w.e.f. 01.04.2021.The Central Board of Direct Taxes(CBDT) had issued a Notification No.38A/2021 dated 27.04.2021, inter aliaproviding that the provisions of Section 148 of the Act as it existed prior tothe Finance Act, 2021 coming into force, would be applicable to the noticesissued under Section 148 of the Act. The said notification was the subjectmatter of challenge by various petitions. On 28.02.2022, the petitionerchallenged the notice dated 31.03.2021 issued under Section 148 of the Actby filing a writ petition captioned Mansi Aggarwal v. Income Tax Officer :WP(C) 3692 of 2022. 7.The controversy with regard to the issuance of the notices post31.03.2021 under the unamended provisions was settled by the SupremeCourt in Union of India v. Ashish Aggarwal : 2022 SCC OnLine SC 543.In terms of the said decision, the notices issued during the period 01.04.2021and 30.06.2021 were required to be treated as the notices under Section148A(b) of the Act. 7.The controversy with regard to the issuance of the notices post31.03.2021 under the unamended provisions was settled by the SupremeCourt in Union of India v. Ashish Aggarwal : 2022 SCC OnLine SC 543.In terms of the said decision, the notices issued during the period 01.04.2021and 30.06.2021 were required to be treated as the notices under Section148A(b) of the Act. 8.It is also relevant to mention that in Suman Jeet Agarwal v. IncomeTax Officer & Ors.: 2022 SCC OnLine Del 3141, this court had alsoconsidered the question of notices that were generated on 31.03.2021 butwere delivered on 01.04.2021 or thereafter. The court had held that theprovisions of the Finance Act, 2021 would apply in such cases. 9.In the aforesaid backdrop, the AO issued another notice dated11.10.2022 under Section 148A(b) of the Act in respect of the AY 2015-16.The petitioner responded to the said notice on 17.11.2022 raising variousobjections, however, the same was not accepted and the AO issued an orderdated 24.11.2022 under Section 148A(d) of the Act concluding that this is afit case for issuing of notice under Section 148 of the Act. The petitioner assailed the said notice dated 11.10.2022 and the order dated 24.11.2022passed under Section 148A(d) of the Act as well as the notice dated24.11.2022 issued under Section 148 of the Act by filing a writ petitionbefore this court being Mansi Aggarwal v. Income Tax Officer: WP(C)3798 of 2023. The said petition was allowed in terms of the order dated27.03.2023 and the order dated 24.11.2022 issued under Section 148A(d) ofthe Act was set aside. The operative part of the said order is set out below: “13. According to us, the AO will have to take into account, thereply and inter alia, the defence raised by the petitioner, with regardto the commencement of the reassessment proceedings against her. 14. Accordingly, the impugned order dated 24.11.2022 is set aside.Liberty is, however, given to the AO to carry out a de novo exercise. 15. Needless to add, in case the AO seeks to recommencereassessment proceedings, he will furnish the relevant material, ifnot already supplied, to the petitioner which links the petitioner tothe alleged transaction. 16. The AO will also take into account, the defence raised by thepetitioner in her reply. If any fresh material is furnished to thepetitioner, liberty will be given by the AO to the petitioner, to file asupplementary reply. The AO will also grant a personal hearing tothe petitioner and/or her authorised representative. 17. The writ petition is disposed of in the aforesaid terms.” 10.Pursuant to the aforesaid order, the AO issued the impugned noticedated 09.06.2023 under Section 148A(b) of the Act in respect of the AY2015-16. The petitioner once again responded to the said notice. However,the AO was not persuaded to drop the proceeding, and accordingly, issuedan order dated 13.07.2023 under Section 148A(d) of the Act along with anotice under Section 148 of the Act. 11.If the impugned notice dated 09.06.2023 issued under Section148A(b) of the Act is viewed on a stand-alone basis, the same would clearlybe barred by limitation as it was issued beyond the period of six years fromthe end of the assessment year relevant to the year in which the notice wasissued. However, Mr Debesh Panda, the learned counsel appearing for theRevenue, contends that the proceedings initiated in terms of the impugnednotice dated 09.06.2023 cannot be viewed without reference to the orderdated 27.03.2023 passed by this court in WP(C) 3798 of 2023. He submitsthat the AO has made an apparent error by treating the said order as adirection to conduct a fresh exercise by issuance of a fresh notice underSection 148A(b) of the Act. He submits that the directions to the AO “tocarry out a de novo exercise” as issued by this court in terms of the orderdated 27.03.2023 in WP(C) 3798 of 2023 was required to be confined inconsidering the petitioner’s response and passing a fresh order under Section148A(d) of the Act. 12.He also points out that this court had not satisfied the notice dated11.10.2022 issued under Section 148A(b) of the Act but had set aside theorder dated 24.11.2022, which was passed under Section 148A(d) of theAct.He clearly stated that merely because the AO has misconstrued theorders passed by this court should not be the ground for holding that theexercise conducted by the petitioner pursuant to the orders passed by thiscourt are barred by limitation.He submits that it would be necessary toconstrue the exercise as one that it commenced pursuant to the notice dated11.10.2022 issued under Section 148A(b) of the Act. However, Mr Panda isunable to point out any ground on which the proceedings under Section 147of the Act can now be permitted to continue since the time period for passing an assessment order as specified under Section 153(2) of the Act,has since expired. 13.We have reservation as to Mr Panda’s contention that the proceedingsfor initiation of the reassessment were necessarily be read to mean ascommenced by virtue of the notice dated 11.10.2022 issued under Section148A(b) of the Act. However, it is not necessary for this court to examinethe same in any detail. This is for the reason that even if his contention issustained, and the impugned order dated 13.07.2023 passed under Section148A(d) of the Act is construed to be an order passed pursuant to the noticedated 10.10.2022 issued under Section 148A(b) of the Act; the time forpassing the reassessment order has expired. In terms of Section 153(2) of theAct, an assessment order under Section 147 of the Act is required to bepassed within a period of twelve months from the date of issuance of noticeunder Section 148 of the Act.In this case, the notice was issued on13.07.2023 and the period as stipulated under Section 153(2), has expired. 14.In view of the above, the AO is now restrained from passing any orderpursuant to the notice dated 13.07.2023 passed under Section 148 of the Act.The petition is disposed of in the aforesaid terms.15.The Pending applications also stand disposed of. VIBHU BAKHRU, J NOVEMBER 21, 2024/ tr SWARANA KANTA SHARMA, J Click here to check corrigendum, if any