Facts of the Case

The petitioner, Rajiv Kumar Khandelwal, is an individual who filed his return of income for Assessment Year 2015-16 on 30.09.2015 declaring an income of ₹1,36,81,160. The Assessing Officer issued a notice dated 07.06.2021 under Section 148 seeking to reopen the assessment for AY 2015-16 without following the procedure prescribed under Section 148A, despite the notice being issued after 31.03.2021.

Subsequently, by communication dated 20.05.2022, the Assessing Officer referred to the Supreme Court decision in Union of India & Ors. vs. Ashish Agarwal and treated the notice dated 07.06.2021 as a deemed notice under Section 148A(b). The petitioner submitted his reply on 04.06.2022. Thereafter, the Assessing Officer passed an order dated 28.07.2022 under Section 148A(d) holding that it was a fit case for issuance of notice under Section 148 and issued a consequential notice dated 28.07.2022 for AY 2015-16. Aggrieved, the petitioner approached the Delhi High Court.

Issues Involved

Whether reassessment proceedings initiated for AY 2015-16 pursuant to notices issued on or after 01.04.2021 were sustainable in law in view of the Revenue’s concession recorded by the Supreme Court in Union of India & Ors. vs. Rajeev Bansal, and whether the impugned notices and proceedings were liable to be set aside as barred by limitation.

Petitioner’s Arguments

The petitioner contended that the reassessment proceedings were squarely covered by the concession made by the Revenue before the Supreme Court in Rajeev Bansal, wherein it was conceded that for AY 2015-16, all notices issued on or after 01.04.2021 were required to be dropped as they would not fall within the period prescribed under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. It was argued that the impugned notice dated 28.07.2022 and the proceedings pursuant thereto were therefore without jurisdiction and liable to be quashed.

Respondent’s Arguments

The Revenue did not dispute the applicability of the concession recorded in Rajeev Bansal to the facts of the present case. The Revenue also did not controvert that the impugned notice under Section 148 was issued on 28.07.2022, i.e., after 01.04.2021, for AY 2015-16.

Court Order / Findings

The Delhi High Court observed that paragraph 19(f) of the Supreme Court’s decision in Union of India & Ors. vs. Rajeev Bansal categorically records the Revenue’s concession that for Assessment Year 2015-16, all notices issued on or after 01.04.2021 are required to be dropped as they would not fall for completion within the period prescribed under TOLA. The Court further noted that the said concession was subsequently affirmed and applied by the Supreme Court in Deepak Steel and Power Ltd. vs. Central Board of Direct Taxes.

Applying the aforesaid binding precedents, the High Court held that the impugned notice dated 28.07.2022 issued under Section 148 and all proceedings initiated pursuant thereto were unsustainable in law. The Court also noted that the issue was covered in favour of the petitioner by its earlier decision in Makemytrip India Pvt. Ltd. vs. DCIT.

Important Clarification

The High Court clarified that once the Revenue has conceded before the Supreme Court that reassessment notices for AY 2015-16 issued on or after 01.04.2021 are invalid, such concession is binding on the Department and must be uniformly applied. Continuation of reassessment proceedings in disregard of such concession amounts to lack of jurisdiction.

Final Outcome

The writ petition was allowed. The notice dated 28.07.2022 issued under Section 148 of the Income-tax Act for Assessment Year 2015-16 was quashed and set aside, and all proceedings initiated pursuant thereto were also set aside.

Link to download the order - https://www.mytaxexpert.co.in/uploads/1769677462_RAJIVKUMARKHANDELWALVsDEPUTYCOMMISSIONEROFINCOMETAXCIRCLE131DELHIANR..pdf

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