Facts of the Case

The petitioner, MakeMyTrip India Private Limited, filed two writ petitions challenging reassessment proceedings for Assessment Years 2020-21 and 2021-22. The challenge was directed against show cause notices dated 13.03.2025 issued under Section 148A(1) of the Income-tax Act, 1961, orders dated 29.06.2025 passed under Section 148A(3), and consequential notices issued on the same date under Section 148. The notices broadly referred to “search and seizure under Section 132 on MLBEs of Insurance Sector (Ajay Mehta Group)” without specifying how the petitioner’s income had escaped assessment. The petitioner submitted detailed replies explaining the nature and source of receipts amounting to ₹11,00,80,752 for AY 2021-22 and ₹39,27,95,754 for AY 2020-21. Despite the replies, the Assessing Officer passed orders under Section 148A(3) without dealing with the explanations provided.

Issues Involved

Whether notices issued under Section 148A(1) without supplying specific information indicating escapement of income were valid, whether orders passed under Section 148A(3) without recording reasons for rejecting the assessee’s replies were sustainable, and whether consequential reassessment notices under Section 148 could survive such defective orders.

Petitioner’s Arguments

The petitioner contended that Section 148A(1) mandates that the notice to show cause must be accompanied by information suggesting escapement of income, which was absent in the impugned notices. It was argued that the notices were vague and merely referred to a third-party search without linking the petitioner to any incriminating material. The petitioner further submitted that detailed replies explaining the receipts were filed, but the Assessing Officer failed to consider or deal with the same while passing the orders under Section 148A(3), rendering the orders arbitrary and violative of principles of natural justice.

Respondent’s Arguments

The Revenue defended the reassessment proceedings, submitting that the notices and orders were issued pursuant to investigation material arising from a search and seizure operation and that the Assessing Officer was justified in initiating proceedings under the reassessment framework.

Court Order / Findings

The Delhi High Court examined the impugned orders passed under Section 148A(3) and found that they did not disclose any reasons or grounds on which the Assessing Officer disagreed with the replies filed by the petitioner. The Court observed that the orders were completely non-speaking, particularly in light of the detailed explanations offered by the petitioner. It held that such orders could not sustain reassessment proceedings. The Court further held that the Assessing Officer is obliged to provide the information relied upon while deciding notices under Section 148A(1) and to pass a reasoned order under Section 148A(3) dealing with the assessee’s replies.

Important Clarification

The Court clarified that reassessment proceedings under the new regime require strict adherence to procedural safeguards under Section 148A. Notices must disclose the information relied upon, and orders under Section 148A(3) must be reasoned and reflect application of mind to the assessee’s replies. Failure to do so renders the proceedings unsustainable.

Final Outcome

The writ petitions were disposed of. The impugned orders dated 29.06.2025 passed under Section 148A(3) and the consequential notices issued under Section 148 for both assessment years were set aside. The matters were remanded to the Assessing Officer to supply the information relied upon, grant the petitioner an opportunity to file additional replies within two weeks of receipt of such information, and thereafter pass fresh reasoned orders under Section 148A(3) in accordance with law within eight weeks.

Link to download the order - https://www.mytaxexpert.co.in/uploads/1769503218_MAKEMYTRIPINDIAPRIVATELIMITEDVsDEPUTYCOMMISSIONEROFINCOMETAXCIRCLE161DELHIANRANR..pdf

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