+ W.p.(C) v. Assistant Commissioner Of Income Tax Central Circle 28 Delhi & Ors

$~98 IN THE HIGH COURT OF DELHI AT NEW DELHI+W.P.(C) 17544/2024 & CM APPL. 74712/2024HERIKA NARANG.....PetitionerHERIKA NARANG.....Petitioner .....PetitionerThrough:Mr. Ved Jain, Mr. Nischay Kantoor,Ms. Soniya Dodeja, Advocates. versus ASSISTANT COMMISSIONER OF INCOME TAX CENTRALCIRCLE 28 DELHI & ORS......Respondents .....Respondents Through:Mr. Anurag Ojha, SSC; Mr. V.K.Saksena, JSC; Ms. Hemlata Rawat,JSC with Mr. Dipak Raj, Mr. SubhamKr., Advocates. CORAM:HON'BLE MR. JUSTICE VIBHU BAKHRUHON'BLE MR. JUSTICE TEJAS KARIAO R D E R %26.03.2025 1.The petitioner has filed the present petition, inter alia, impugningnotice dated 30.08.2024 [hereafter the impugned notice] issued underSection 148 of the Income Tax Act, 1961 [hereafter the Act] in respect ofassessment years (AY) 2016-17. 2.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 of the 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. 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/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 ofIncomeTaxCentralCircle-28Delhi&Ors.:NeutralCitationNo.: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 that 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 that insofarascompletedorunabatedassessmentswereconcerned, 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, 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 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. 5.The petition is, accordingly, allowed and the impugned notice is setaside. Pending application stands also disposed of. VIBHU BAKHRU, J MARCH 26, 2025RK TEJAS KARIA, J Click here to check corrigendum, if any