Tax (Appeals)- Xxv [Cit(A) Cit v. Kabul Chawla: (2016) 380 Itr 573Gutgutia: (2017) 395 Itr 526Absence Of Incriminating Material.the Cit(A) Before The Learned Income Tax Appellate Tribunal [Relyi

$~44 *IN THE HIGH COURT OF DELHI AT NEW DELHI+W.P.(C) 5780/2025 & CM APPL. 26366-68/2025MEERA GUPTA.....PetitionerThrough:Mr Aditya Kumar Garg, Advocate.versus ASSISTANT COMMISSIONER OF INCOME TAX AND ANR .....RespondentsThrough:Mr Sanjay Kumar, SSC, Ms MonicaBenjaminandMs EashaKadian,JSCs for the Revenue. JSCs for the Revenue.CORAM:HON'BLE MR. JUSTICE VIBHU BAKHRUHON'BLE MR. JUSTICE TEJAS KARIAO R D E R02.05.2025The petitioner has filed the present petition,notice dated 21.02.2024 [impugned noticeIncome Tax Act, 1961 [the Actand his family members (Smt. Meera Gupta and Mukul Gupta) (Smt. Meera Gupta and Mukul Gupta). CORAM:HON'BLE MR. JUSTICE VIBHU BAKHRUHON'BLE MR. JUSTICE TEJAS KARIAO R D E R%02.05.2025 1.The petitioner has filed the present petition, inter alia, impugning thenotice dated 21.02.2024 [impugned notice] issued under Section 148 of theIncome Tax Act, 1961 [the Act] in respect of the Assessment Year 2013-14. 2.The petitioner had filed its return of income for AY 2013-14 on10.07.2013, declaring an income of ₹46,59,180/-. On 11.11.2014, a search was conducted under Section 132 of the Act in the case of Sh. Y.K. Guptaand his family members (Smt. Meera Gupta and Mukul Gupta) (Smt. Meera Gupta and Mukul Gupta). 3.It is the petitioner’s contention that no incriminating materialpertaining to the searched persons was found during the said search thus, nofurther proceedings were warranted. 4.Pursuant to the search, proceedings under Section 153A of the Actwere initiated against the petitioner by issuance of a notice dated22.12.2016. Thereafter, the assessment order dated 30.12.2016 was passedunder the Section 153A read with Section 143(3) of the Act, whereby the petitioner’s taxable income was assessed at ₹23,91,86,934/-. The petitioner contends that the assessment for the assessment year in question was acompleted assessment and, in the absence of any incriminating materialfound during the course of the search, the addition of ₹23,45,27,754/- [4,11,946/- + 4,05,373/- + 10,63,30,435/- + 12,73,80,000/-] made by theAssessing Officer was without jurisdiction and contrary to settledlegal principles. Tax (Appeals)- XXV [CIT(A) CIT v. Kabul Chawla: (2016) 380 ITR 573Gutgutia: (2017) 395 ITR 526absence of incriminating material.the CIT(A) before the learned Income Tax Appellate Tribunal [relying upon the aforesaid decisions. 5.Aggrieved by the assessment order dated 30.12.2016 passed by theAO, the petitioner preferred an appeal before the Commissioner of IncomeTax (Appeals)- XXV [CIT(A)]. By the order dated 20.09.2019, the CIT(A)deleted the addition made by the AO, by relying on the judgment of thiscourt in CIT v. Kabul Chawla: (2016) 380 ITR 573 and PCIT v. MeetaGutgutia: (2017) 395 ITR 526 and that no addition was permissible in theabsence of incriminating material. 6.The Revenue appealed against the order dated 20.09.2019 passed bythe CIT(A) before the learned Income Tax Appellate Tribunal . Thelearned ITAT dismissed the aforesaid appeal by the order dated 12.10.2022relying upon the aforesaid decisions. 7.On 11.01.2024, relying on CBDT Instruction No. 1/2023 dated23.08.2023, the AO issued a notice under Section 148A(b) of the Actrequiring the petitioner to show cause why the assessment for the relevantassessment year should not be reopened under Section 148 ofthe Act. 8.In response to the aforesaid notice, the petitioner filed a reply on25.01.2024, challenging the initiation of the reassessment proceedings. Thepetitioner claimed that the notice dated 11.01.2024 was time barred and not valid, as it was not signed by the AO who issued the notice. 9.On 21.02.2024, the AO rejected the petitioner’s reply, and passed anorder under Section 148A(d) of the Act, deeming it a fit case for issuing anotice under Section 148 of the Act, and the AO on 21.02.2024, issued anotice under Section 148 of the Act, asserting that the proceedings werewithin the limitation period by invoking Section 150 of the Act. 8.In response to the aforesaid notice, the petitioner filed a reply on25.01.2024, challenging the initiation of the reassessment proceedings. Thepetitioner claimed that the notice dated 11.01.2024 was time barred and not valid, as it was not signed by the AO who issued the notice. 9.On 21.02.2024, the AO rejected the petitioner’s reply, and passed anorder under Section 148A(d) of the Act, deeming it a fit case for issuing anotice under Section 148 of the Act, and the AO on 21.02.2024, issued anotice under Section 148 of the Act, asserting that the proceedings werewithin the limitation period by invoking Section 150 of the Act. 10.The impugned notice is clearly beyond the period as stipulated underSection 149(1) of the Act.However, it is the Revenue’s case that theimpugned notice has been issued within the stipulated time by virtue of thenon-obstante clause under Section 150 of the Act. The Revenue claims thatthe impugned notice is 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 or a requisition made under Section 132A of the Act. TheRevenue construes the said decision as constituting a finding or a directionfor issuing such notices in respect of cases such as that of the assessee’s. of 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 or a requisition made under Section 132A of the Act. TheRevenue construes the said decision as constituting a finding or a directionfor issuing such notices in respect of cases such as that of the assessee’s. 11.The question whether the decision in the case ofPrincipalCommissioner of Income-tax, Central-3 v. Abhisar Buildwell (P.) Ltd.(supra) constitutes a finding and/or a direction for issuance of notices underSection 148 of the Act in cases, which are otherwise beyond the period asstipulated under Section 149 of the Act is no longer res integra. This courtin the case of ARN Infrastructures India Ltd. v. Assistant Commissioner ofIncomeTaxCentalCircle-28Delhi&Ors.:NeutralCitation No.:2024:DHC:7423-DB had rejected a similar contention. The relevantextract 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. No.:2024:DHC:7423-DB had rejected a similar contention. The relevantextract 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 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, which 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 remedyreiterated 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 thatinsofarascompletedorunabatedconcerned, they could be reopened by the AO by invocationof Sections 147/148 of the Act, subject to the fulfillment ofthe conditions147/148 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 thatpowerbeingotherwisecompliantwith otherwiseimbuethecommencement 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.” 12.Plainly, the controversy involved in this petition 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.13.The petition is, accordingly, allowed and the impugned notice is setaside. The pending applications are also disposed of. Commissioner of Income Tax Cental Circle-28 Delhi & Ors.not applicable, in the given facts, is erroneous and thus, rejected.aside. The pending applications are also disposed of.M VIBHU BAKHRU, J TEJAS KARIA, J MAY 02, 2025/MClick here to check corrigendum, if any