Facts of the Case

The petitioner, B.C. Enterprises, filed a writ petition challenging reassessment proceedings initiated for Assessment Year 2014-15. The petitioner assailed the initial notice dated 07.06.2021 issued under Section 148, subsequent notices dated 17.05.2022 and 05.07.2022 issued under Section 148A(b), the order dated 26.07.2022 passed under Section 148A(d), and the consequential notice dated 26.07.2022 issued under Section 148. The petitioner also challenged the validity of Notifications dated 31.03.2021 and 27.04.2021 issued under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA), contending that the notices were time-barred and without jurisdiction.

Issues Involved

Whether the reassessment proceedings initiated under Sections 148 and 148A for AY 2014-15 were sustainable in law in view of settled judicial precedents, whether the impugned notices and order suffered from jurisdictional and limitation defects, and whether the matter required remand to the Assessing Officer for fresh consideration.

Petitioner’s Arguments

The petitioner submitted that in view of the settled position of law laid down by the Hon’ble Supreme Court in Union of India vs. Rajeev Bansal, the Delhi High Court in Ram Balram Buildhome Pvt. Ltd. vs. Income Tax Officer, and the Madhya Pradesh High Court in Sandeep Singh Saluja vs. Income Tax Department, the impugned notice dated 07.06.2021 under Section 148, subsequent notices under Section 148A(b), the order under Section 148A(d), and the consequential notice under Section 148 were liable to be set aside. It was contended that the proceedings were time-barred, jurisdictionally flawed, and based on incorrect information.

Respondent’s Arguments

The Revenue submitted that instead of outright quashing, the appropriate course would be to remand the matter back to the Assessing Officer to enable him to apply his mind to the facts and the law emerging from the judicial precedents and thereafter pass appropriate orders in accordance with law.

Court Order / Findings

The Delhi High Court noted that the legal position governing reassessment proceedings post-Finance Act, 2021 stood clarified by the Supreme Court in Rajeev Bansal and by various High Courts, including its own decision in Ram Balram Buildhome Pvt. Ltd. The Court also took note of the Supreme Court’s order in Deputy Commissioner of Income Tax vs. Reliance Industries Limited, wherein a similar course of remand had been adopted. In view of the submissions of both parties, the Court held that the ends of justice would be met by remanding the matter to the Assessing Officer. The petitioner was directed to submit the computation chart already placed on record before the Court to the Assessing Officer on the date and time to be communicated by the Assessing Officer. The Assessing Officer was directed to grant a hearing to the petitioner’s representative and thereafter pass an appropriate order within four weeks as an outer limit.

Important Clarification

The High Court clarified that reassessment proceedings must strictly conform to the statutory framework under Sections 148 and 148A as interpreted by binding judicial precedents. Where the legal position has undergone authoritative clarification, the Assessing Officer is required to reconsider the matter afresh by applying the correct law and after granting due opportunity of hearing to the assessee.

Final Outcome

The writ petition was disposed of. The matter was remanded to the Assessing Officer for fresh consideration in accordance with law after granting an opportunity of hearing to the petitioner, with a direction to pass an appropriate order within four weeks.

Link to Download Order- https://www.mytaxexpert.co.in/uploads/1769594506_B.C.ENTERPRISESVsINCOMETAXOFFICERWARD583DELHI.pdf

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