+ W.p.(C) v. Deputy Commissioner Of Income-Tax Central Circle - 31, Delhi & Ors

$~67 IN THE HIGH COURT OF DELHI AT NEW DELHI+W.P.(C) 17524/2024 CM APPL. 74651-52/2024NV INTERNATIONAL PRIVATE LIMITEDNV INTERNATIONAL PRIVATE LIMITED .....Petitioner Through:Mr Manuj Sabharwal, Mr Drona Negiand Mr Devvrat Tiwari, Advocates. versus DEPUTY COMMISSIONER OF INCOME-TAXCENTRAL CIRCLE - 31, DELHI & ORS. .....Respondents Through:Mr Shlok Chandra, SSC, Ms NaincyJain and Ms Madhavi Shukla, JSCsand Mr Sushant Pandey, Advocate. CORAM:HON'BLE THE ACTING CHIEF JUSTICEHON'BLE MR. JUSTICE TUSHAR RAO GEDELAO R D E R %19.12.2024 1.Issue notice. The learned counsel for the Revenue accepts notice. 2.The petitioner has filed the present petition, inter alia, impugning anotice dated 31.08.2024 (hereafter the impugned notice) issued underSection 148 of the Income Tax Act, 1961 (hereafter the Act) in respect of theassessment year (AY) 2013-14. 3.The petitioner (hereafter the Assessee) claims that the impugnednotice is barred by the limitation. The Assessing Officer (AO) hadcommenced the proceedings under Section 153A of the Act by issuance of anotice dated 22.11.2018. The said proceedings culminated in the assessmentorder dated 31.12.2019 under Section 153A of the Act. The Assessee hadappealed the said assessment order before the learned Commissioner ofIncome Tax (Appeals) [hereafter the CIT(A)]. The said appeal was allowed and the learned CIT(A) deleted the additions made by the AO by theassessment order dated 31.12.2019. 4.The Revenue, taking a cue from the decision of the Supreme Court inPrincipal Commissioner of Income-tax, Central-3 v. Abhisar Buildwell(P.) Limited:(2024) 2 SCC 433, issued the notice dated 08.08.2024 underSection 148A(b) of the Act, which is also impugned in the present petition.Pursuant to the said notice, the AO passed the order dated 31.08.2024 underSection 148A(d) of the Act. 5.The Revenue has construed the observations made by the SupremeCourt in Principal Commissioner of Income-tax, Central-3 v. AbhisarBuildwell (P.) Limited (supra) as findings and directions for proceedingunder Section 147 of the Act. Thus, according to the Revenue, the period oflimitation as prescribed under Section 149(1) of the Act is not applicable byvirtue of Section 150 of the Act. 6.Concededly, the said question is covered by an earlier decision of thiscourt in ARN Infrastructures India Ltd. v. Assistant Commissioner ofIncome Tax Cental Circle-28 Delhi & Ors.: Neutral Citation :2024:DHC :7423-DB. The relevant extract of the said decision is set out below: “38. It is pertinent to note that a reference toSections 147 and 148 of the Act in AbhisarBuildwell firstly appears in paragraph 33 of thereport and where the Supreme Court observed thatin cases where a search does not result in anyincriminatingmaterialbeingfound,theonlyremedy that would be available to the Revenuewould be to resort to reassessment. 39. However, the Supreme Court caveated thatobservation by observing that the initiation ofreassessment would be “…..subject to fulfilment ofobservation by observing that the initiation ofreassessment would be “…..subject to fulfilment of :7423-DB. The relevant extract of the said decision is set out below: “38. It is pertinent to note that a reference toSections 147 and 148 of the Act in AbhisarBuildwell firstly appears in paragraph 33 of thereport and where the Supreme Court observed thatin cases where a search does not result in anyincriminatingmaterialbeingfound,theonlyremedy that would be available to the Revenuewould be to resort to reassessment. 39. However, the Supreme Court caveated thatobservation by observing that the initiation ofreassessment would be “…..subject to fulfilment ofobservation by observing that the initiation ofreassessment would be “…..subject to fulfilment of the conditions mentioned in Sections 147/148, as insuch a situation, the Revenue cannot be left with noremedy”. This sentiment came to be reiterated withthe Supreme Court observing that the power of theRevenue to initiate reassessment must be savedfailing which it would be left with no remedy. Itwas thereafter observed in paragraph 36.4 of thereport that insofar as completed or unabatedassessmentswereconcerned,theycouldbereopened by the AO by invocation of Sections147/148 of the Act, subject to the fulfillment of theconditions“……asenvisaged/mentionedunderSections 147/148 of the Act and those powers aresaved”.40. It thus becomes apparent that the liberty whichthe Supreme Court accorded and the limited rightinhering in the Revenue to initiate reassessmentwassubjecttothatpowerbeingotherwisecompliantwiththeChapterpertainingtoreassessmentascontainedintheAct.Theobservations of the Supreme Court cannot possiblybe read or construed as a carte blanche enabling therespondentstoovercomeandoverridetherestrictions that otherwise appear in Section 149 ofthe Act. The observations of the Supreme Court inAbhisar Buildwell were thus intended to merelyconveythattheannulmentofthesearchassessments would not deprive or denude theRevenue of its power to reassess and whichindependentlyexisted.However,theSupremeCourt being mindful of the statutory prescriptions,which otherwise imbue the commencement ofreassessment,qualifiedthatobservationbyproviding that such an action would have to be inaccordance with law. This note of caution appearsat more than one place in that judgment and isapparent from the Supreme Court observing that thepower to reassess would be subject to the fulfilment of the conditions mentioned in Sections 147 and148 of the Act.” 7.In view of the above, the learned counsel appearing for the Revenuefairly accepts that the impugned notice ought to be set aside as it is barred bylimitation. 8.Accordingly, the present petition is allowed and the impugned noticeis set aside. 9.The petition is disposed of in the aforesaid terms. Pendingapplications also stand disposed of. VIBHU BAKHRU, ACJ DECEMBER 19, 2024 M TUSHAR RAO GEDELA, J Click here to check corrigendum, if any