> v. Assisstant Commissioner Of Income Tax Cental Circle-13 Delhi & Ors

$~85 *IN THE HIGH COURT OF DELHI AT NEW DELHI+W.P.(C) 6558/2024 & CM APPL. 27318/2024BALAR MARKETING PRIVATE LIMITED .....Petitioner Through:Mr Ruchesh Sinha and Ms MonalisaMaity, Advocates. versus ASSISSTANT COMMISSIONER OF INCOME TAXCENTAL CIRCLE-13 DELHI & ORS. .....RespondentsThrough:Mr Vipul Aggarwal, SSC, Ms SakshiShairwal,andMrAkshatSingh,JSCs. CORAM: HON'BLE MR. JUSTICE VIBHU BAKHRUHON'BLE MR. JUSTICE TEJAS KARIAO R D E R01.05.2025 % 1.The petitioner has filed the present petition, inter alia, impugning thenotice dated 30.03.2024 [impugned notice] issued under Section 148 of theIncome Tax Act, 1961 [the Act] in respect of Assessment Year 2013-14. 2.On 23.03.2021, a search was conducted under Section 132 of the Actin the case of Sh. Parasmal Jain including the petitioner. It is the petitioner’scontention that no incriminating material pertaining to the searched personswas found during the said search thus, no further proceedings werewarranted. 3.However, subsequently, proceedings under Section 153A of the Actwere initiated against the petitioner by issuance of a notice dated 07.12.2021issued under Section 153A of the Act. Pursuant to the said notice, thepetitioner had filed its return of income for AY 2012-13, declaring an income of ₹1,12,39,280/-. The Assessing Officer proceeded with anassessment order dated 31.03.2022 passed under the Section 153A read withSection 143(3) of the Act. The petitioner contends that the assessment forthe assessment year in question was a completed assessment and, in absenceof any incriminating material found during the course of the search, theaddition of ₹24,54,43,710/- made by the AO was without jurisdiction and contrary to settled legal principles. 4.Aggrieved by the assessment order dated 31.03.2022 passed by theAO, the petitioner preferred an appeal before the Commissioner of IncomeTax (Appeals) [CIT(A)]. The CIT(A) deleted the addition made by the AO,by an order dated 11.08.2023. The CIT(A) relied upon the decision of theSupreme Court in PCIT v. Abhisar Buildwell Pvt. Limited: (2024) 2 SCC433, and held that no addition was permissible in the absence ofincriminating material, as the year in question was not an abated assessmentyear. 5.On 01.02.2024, relying on Section 150 of the Act and CBDTInstruction No. 1/2023 dated 23.08.2023, the AO issued a notice underSection 148A(b) of the Act requiring the petitioner to show cause why theassessment for the relevant assessment year should not bereopened under Section 148 of the Act. 6.In response to the aforesaid notice, the petitioner filed a reply on26.02.2024, challenging the initiation of the reassessment proceedings. Thepetitioner claimed that Section 150(1) of Act is inapplicable, as there was nodirection from the Supreme Court to reopen the case, citing the rejection ofsuch a prayer by the Revenue in the PCIT v. Abhisar Buildwell Pvt. Ltd.(supra). 7.On 28.03.2024, the AO rejected the petitioner’s reply, and passed anorder under Section 148A(d) of the Act, deeming it a fit case for reopeningand further issued a notice under Section 148 of the Act, asserting that theproceedings were within the limitation period by invoking Section 150 ofthe Act. 8.In ARN Infrastructures India Ltd. v. Assistant Commissioner ofIncomeTaxCentalCircle-28Delhi&Ors.:NeutralCitationNo.:2024:DHC:7423-DB, this court held as under: “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. 8.In ARN Infrastructures India Ltd. v. Assistant Commissioner ofIncomeTaxCentalCircle-28Delhi&Ors.:NeutralCitationNo.:2024:DHC:7423-DB, this court held as under: “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. The observations of the Supreme Court cannot possibly be reador construed as a carte blanche enabling the respondents toovercome and override the restrictions that otherwise appearin 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.” 9.Plainly, the controversy involved in the present petition is covered bythe decision 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.10.The petition is, accordingly, allowed and the impugned notice is setaside. The pending application is also disposed of. VIBHU BAKHRU, J MAY 01, 2025M TEJAS KARIA, J Click here to check corrigendum, if any