Facts of the Case

The petitioner, Amandeep Singh, proprietor of Guru Kripa Enterprises, filed his return of income for Assessment Year 2021–22 on 14.03.2022 declaring income of ₹8,53,950. On 29.03.2025, the Revenue issued a notice under Section 148A(1) stating that income chargeable to tax had escaped assessment based on risk management inputs alleging association with dummy or shell entities and bank accounts. The petitioner filed a reply on 07.04.2025 disputing the allegations and denying any link with the alleged bank accounts or entities.

Subsequently, another notice dated 13.06.2025 under Section 148A(1) was issued, to which the petitioner again responded by detailed replies dated 16.06.2025 and 21.06.2025. On 30.06.2025, the Assessing Officer passed an order under Section 148A(3) and issued a notice under Section 148 initiating reassessment proceedings. Aggrieved, the petitioner approached the Delhi High Court.

Issues Involved

Whether issuance of multiple notices under Section 148A(1) vitiated reassessment proceedings, whether there were two different sets of “reasons to believe”, whether the Assessing Officer failed to conduct mandatory inquiry under Section 148A(a), and whether the reassessment proceedings suffered from lack of jurisdiction or violation of principles of natural justice.

Petitioner’s Arguments

The petitioner contended that two different notices under Section 148A(1) contained different reasons to believe, rendering the reassessment proceedings invalid. It was argued that bank accounts and dummy entities alleged by the Revenue were not associated with the petitioner and that GST compliance was duly maintained. The petitioner further submitted that the Assessing Officer failed to conduct inquiry under Section 148A(a) and that jurisdiction relating to GST discrepancies lay with GST authorities and not the Income Tax Department.

 

 

Respondent’s Arguments

The Revenue submitted that there was no change or substitution of reasons to believe and that subsequent communications only elaborated and corroborated the original information received from investigation wing regarding transactions with dummy entities. It was argued that post-Finance Act 2022, Section 148A(a) no longer mandates prior inquiry. The Revenue contended that the petitioner was granted adequate opportunity and that the reassessment proceedings were initiated strictly in accordance with law.

Court Order / Findings

The Delhi High Court held that there was no ambiguity or contradiction in the reasons to believe furnished to the petitioner and that the subsequent notice only rendered the earlier notice infructuous without causing prejudice. The Court observed that Section 148A(a) requiring prior inquiry stood omitted after the Finance Act, 2022 and was not applicable. The Court further held that the Assessing Officer duly considered the petitioner’s replies and that there was no jurisdictional defect or violation of principles of natural justice. Reliance placed on Rajnish Puri was found to be misplaced as the facts were distinguishable.

Important Clarification

The Court clarified that issuance of a fresh notice under Section 148A(1) with the same contents renders the earlier notice infructuous and does not invalidate reassessment proceedings. It was further clarified that post-2022, prior inquiry under Section 148A(a) is no longer mandatory before issuing notice under Section 148.

Final Outcome

The writ petition was dismissed. The notices issued under Sections 148A and 148 of the Income-tax Act for Assessment Year 2021–22 were upheld as valid, and the reassessment proceedings were permitted to continue in accordance with law.

Link to Download order- https://mytaxexpert.co.in/uploads/1769502718_AMANDEEPSINGHPROPRIETORGURUKRIPAENTERPRISESVsOFFICEOFTHEASSISTANTCOMMISSIONEROFINCOMETAXCIRCLE101DELHI.pdf

 

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.