Facts of the Case

The petitioner, Rajesh Agarwal, filed a writ petition challenging the initial notice dated 17.06.2021 issued under Section 148 of the Income-tax Act, 1961, subsequent notices dated 24.05.2022, the order dated 28.06.2022 passed under Section 148A(d), and the consequential notice dated 29.06.2022 issued under Section 148 for Assessment Year 2013–14. The petitioner contended that the impugned proceedings were illegal, time-barred, and without jurisdiction, inter alia alleging violation of limitation under Section 149 and improper invocation of reassessment provisions contrary to Section 153C and applicable CBDT instructions.

Issues Involved

Whether the reassessment proceedings initiated for Assessment Year 2013–14 were barred by limitation under Section 149 in view of settled judicial precedents, whether the impugned notices and order under Section 148A(d) were sustainable, and whether the matter required reconsideration by the Assessing Officer applying the correct legal position.

Petitioner’s Arguments

The petitioner submitted that in view of the settled position of law laid down by the Supreme Court in Union of India vs. Rajeev Bansal and followed by the Delhi High Court in Ram Balram Buildhome Pvt. Ltd. vs. Income Tax Officer, as well as decisions of other High Courts, the impugned notices and order were liable to be set aside as time-barred and without jurisdiction. It was argued that the reassessment proceedings suffered from multiple jurisdictional infirmities and violated the statutory mandate.

Respondent’s Arguments

The Revenue submitted that instead of quashing the reassessment proceedings outright, the appropriate course would be to remand the matter to the Assessing Officer to enable him to independently apply his mind to the facts of the case and examine the issue of limitation afresh in light of the settled legal position before passing appropriate orders.

Court Order / Findings

The Delhi High Court noted that the controversy raised by the petitioner required examination in the light of the settled position of law as laid down by the Supreme Court in Rajeev Bansal and followed by this Court in Ram Balram Buildhome Pvt. Ltd. The Court also took note of the order passed by the Supreme Court in Deputy Commissioner of Income Tax vs. Reliance Industries Limited, wherein a similar course of remand was adopted.

Accepting the submission of the Revenue, the Court held that the appropriate course would be to remand the matter to the Assessing Officer. The Court directed the petitioner to submit before the Assessing Officer the chart that had been filed before the Court, and directed the Assessing Officer to grant a hearing and thereafter pass appropriate orders in accordance with law.

Important Clarification

The Court clarified that while reconsidering the matter, the Assessing Officer shall independently apply his mind to the facts of the case and the settled legal position relating to limitation, and shall not be influenced by the earlier impugned order passed under Section 148A(d).

Final Outcome

The writ petition was disposed of. The matter was remanded to the Assessing Officer, who was directed to grant a hearing to the petitioner and pass appropriate orders within four weeks as an outer limit after the petitioner submits the requisite chart. All pending applications, if any, were disposed of accordingly.

 

Link to Download Order- https://www.mytaxexpert.co.in/uploads/1769595233_RAJESHAGARWALVsASSISTANTCOMMISSIONEROFINCOMETAXCIRCLE431.pdf 

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