Nagar Dairy Private Limited v. Deputy Commissioner Of Income Tax

$~1, 2 and 3 *IN THE HIGH COURT OF DELHI AT NEW DELHI+W.P.(C) 14664/2024 & CM APPL. 61550/2024 NAGAR DAIRY PRIVATE LIMITED .....PetitionerThrough:Mr Paritosh Jain, Mr Divyansh Jain,Ms Sakshi Srivastav, Mr R. MadhavBora,MrVidhanJainandMrAbhishek, Advocates.Ms Sakshi Srivastav, Mr R. MadhavBora,MrVidhanJainandMrAbhishek, Advocates. versusDEPUTY COMMISSIONER OF INCOME TAX CIRCLE 16(1) DELHI.....Respondent Through:Mr Sanjay Kumar, SSC.AND +W.P.(C) 14706/2024 & CM APPL. 61801/2024 NAGAR DAIRY PRIVATE LIMITED .....Petitioner Through:Mr Paritosh Jain, Mr Divyansh Jain,Ms Sakshi Srivastav, Mr R. MadhavBora,MrVidhanJainandMrAbhishek, Advocates.Ms Sakshi Srivastav, Mr R. MadhavBora,MrVidhanJainandMrAbhishek, Advocates. versus DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 16, DELHI .....RespondentThrough:Mr Sanjay Kumar, SSC.ANDAND +W.P.(C) 14816/2024 & CM APPL. 62270/2024 NAGAR DAIRY PRIVATE LIMITED .....Petitioner Through:Mr Paritosh Jain, Mr Divyansh Jain,Ms Sakshi Srivastav, Mr R. MadhavBora,MrVidhanJainandMrAbhishek, Advocates.Ms Sakshi Srivastav, Mr R. MadhavBora,MrVidhanJainandMrAbhishek, Advocates. versus DEPUTY COMMISSIONER OF INCOME TAXCENTRAL CIRCLE 16, DELHI .....Respondent Through:Mr Sanjay Kumar, SSC. CORAM:HON'BLE MR. JUSTICE VIBHU BAKHRUHON'BLE MS. JUSTICE SWARANA KANTA SHARMA O R D E R28.10.2024 % 1.The petitioner has filed the present petitions, inter alia, impugningnotices dated 13.05.2024 (hereafter the impugned notices) issued underSection 148 of the Income Tax Act, 1961 (hereafter the Act) in respect ofassessment years (AYs) 2008-09, 2009-10 and 2007-08, in W.P.(C)14664/2024, W.P.(C) 14706/2024 and W.P.(C) 14816/2024, respectively. 2.The impugned notices are clearly beyond the period as stipulatedunder Section 149(1) of the Act. However, it is the Revenue’s case that theimpugned notices have been issued within the stipulated time by virtue ofthe non-obstante clause under Section 150 of the Act. The Revenue claimsthat the impugned notices are premised on the ‘findings and directions’ asembodied in the decision of the Supreme Court in Principal Commissionerof Income-tax, Central-3 v. Abhisar Buildwell (P.) Ltd.: (2024) 2 SCC 433.In the said decision, the Supreme Court had held that in certain cases, theassessing officer (AO) could exercise its powers under Section 147/148 ofthe Act, even in cases which are related to a search conducted under Section132 of the Act. The Revenue construes the decision as constituting a findingor a direction for issuing such notices in respect of cases such of theassessee’s. 3.The question whether the decision in the case ofPrincipalCommissioner of Income-tax, Central-3 v. Abhisar Buildwell (P.) Ltd.(supra) constitutes a finding and a direction for permitting the issuance ofnotices under Section 148 of the Act in cases, which are otherwise beyondthe period as stipulated under Section 149 of the Act is no longer resintegra.This Court in the case of ARN Infrastructures India Ltd. v. Assistant Commissioner of Income Tax Central Circle-28 Delhi & Ors.:NeutralCitationNo.:2024:DHC:7423-DBhadrejectedasimilarcontention. The relevant extract of the said decision is set out below: “38. It is pertinent to note that a reference to Sections 147and 148 of the Act in Abhisar Buildwell firstly appears inparagraph 33 of the report and where the Supreme Courtobserved that in cases where a search does not result in anyincriminating material being found, the only remedy thatwould be available to the Revenue would be to resort toreassessment. Assistant Commissioner of Income Tax Central Circle-28 Delhi & Ors.:NeutralCitationNo.:2024:DHC:7423-DBhadrejectedasimilarcontention. The relevant extract of the said decision is set out below: “38. It is pertinent to note that a reference to Sections 147and 148 of the Act in Abhisar Buildwell firstly appears inparagraph 33 of the report and where the Supreme Courtobserved that in cases where a search does not result in anyincriminating material being found, the only remedy thatwould be available to the Revenue would be to resort toreassessment. 39. However, the Supreme Court caveated that observationby observing that the initiation of reassessment would be“…..subject to fulfilment of the conditions mentioned inSections 147/148, as in such a situation, the Revenue cannotbe left with no remedy”. This sentiment came to bereiterated with the Supreme Court observing that the powerof the Revenue to initiate reassessment must be savedfailing which it would be left with no remedy. It wasthereafter observed in paragraph 36.4 of the report thatinsofarascompletedorunabatedassessmentswereconcerned, they could be reopened by the AO by invocationof Sections 147/148 of the Act, subject to the fulfillment ofthe conditions “……as envisaged/mentioned under Sections147/148 of the Act and those powers are saved”.40. It thus becomes apparent that the liberty which theSupreme Court accorded and the limited right inhering inthe Revenue to initiate reassessment was subject to thatpowerbeingotherwisecompliantwiththeChapterpertaining to reassessment as contained in the Act. Theobservations of the Supreme Court cannot possibly be reador construed as a carte blanche enabling the respondents toovercome and override the restrictions that otherwise appear in Section 149 of the Act. The observations of the SupremeCourt in Abhisar Buildwell were thus intended to merelyconvey that the annulment of the search assessments wouldnot deprive or denude the Revenue of its power to reassessand which independently existed. However, the SupremeCourt being mindful of the statutory prescriptions, whichotherwiseimbuethecommencement ofreassessment,qualified that observation by providing that such an actionwould have to be in accordance with law. This note ofcaution appears at more than one place in that judgment andis apparent from the Supreme Court observing that thepower to reassess would be subject to the fulfilment of theconditions mentioned in Sections 147 and 148 of the Act.” 4.Plainly, the controversy involved in these petitions is covered by thedecision of this Court in ARN Infrastructures India Ltd. v. AssistantCommissioner of Income Tax Cental Circle-28 Delhi & Ors. (supra). Thecontention that the time period as stipulated under Section 149 of the Act isnot applicable, in the given facts, is erroneous and thus rejected. 5.The petition is, accordingly, allowed and the impugned notices are setaside. All pending applications are also disposed of. VIBHU BAKHRU, J OCTOBER 28, 2024RK SWARANA KANTA SHARMA, J Click here to check corrigendum, if any