Facts of the Case

The petitioner, Supershine Laundry Systems Private Limited, filed writ petitions challenging reassessment orders dated 20.03.2025 passed under Section 147 of the Income-tax Act for the relevant assessment years. The petitioner assailed the reassessment proceedings on multiple jurisdictional grounds, including non-compliance with the procedure under Section 148A, lack of valid sanction under Section 151, and absence of territorial jurisdiction of the Assessing Officer who issued the notice under Section 148 and completed reassessment proceedings.

It was contended that the petitioner was assessed in Gurugram, whereas the reassessment notices were issued by an Assessing Officer in Delhi, without any order under Section 127 transferring jurisdiction.

During the course of hearing, the Revenue produced an order dated 17.12.2024 passed under Section 127 of the Act, whereby assessments of multiple assessees, including the petitioner (at Serial No. 85), were centralized and jurisdiction was conferred on the Assessing Officer who had issued the impugned reassessment notices.

Issues Involved

Whether the reassessment orders could be challenged in writ jurisdiction when an efficacious statutory appellate remedy was available, whether the Assessing Officer lacked jurisdiction in absence of an order under Section 127, and whether the High Court should entertain merits of reassessment proceedings in such circumstances.

Petitioner’s Arguments

The petitioner argued that the reassessment proceedings were wholly without jurisdiction as the mandatory procedure under Section 148A was not followed, sanction under Section 151 was defective, and the Assessing Officer in Delhi lacked territorial jurisdiction. After the Revenue produced the Section 127 order, the petitioner sought to challenge the validity of the said order on the ground that no prior notice was issued and that it proceeded on an incorrect assumption regarding the petitioner’s location.

Respondent’s Arguments

The Revenue contended that the reassessment orders could not be said to be wholly without jurisdiction since a valid order under Section 127 had been passed prior to issuance of the reassessment notices, conferring jurisdiction on the Assessing Officer. It was further argued that the petitioner had an effective alternative remedy of appeal under the Income-tax Act and the writ petitions were therefore not maintainable.

Court Order / Findings

The Delhi High Court noted that once the order dated 17.12.2024 under Section 127 was produced, it could not be contended that the Assessing Officer lacked jurisdiction to issue the reassessment notices or pass the reassessment orders. The Court observed that the petitioner had not challenged the Section 127 order in the writ petitions and the grounds now sought to be urged against the said order were beyond the pleadings.

The Court further held that since the petitioner was also assailing the reassessment orders on merits, it was not appropriate for the High Court to entertain the writ petitions in view of the availability of an efficacious statutory appellate remedy under the Act.

Important Clarification

The High Court clarified that dismissal of the writ petitions would not preclude the petitioner from challenging the reassessment orders on all grounds, including jurisdictional issues, before the appellate authority. The Court also clarified that the petitioner was at liberty to separately challenge the order passed under Section 127 in accordance with law.

Final Outcome

The writ petitions were disposed of. The petitioner was granted liberty to avail statutory appellate remedies against the reassessment orders, and the time for filing such appeal was extended by two weeks, with a direction that the appellate authority shall consider the appeal without being influenced by the question of limitation. All rights and contentions of the parties were expressly kept open.

Link to download order https://www.mytaxexpert.co.in/uploads/1769756763_SUPERSHINELAUNDRYSYSTEMSPRIVATELIMITEDVsDEPUTYCOMMISSIONEROFINCOMETAXORS..pdf 

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