Facts of the Case

The petitioner, Swadeshi Tubes Ltd., filed a writ petition relating to Assessment Year 2014–15 challenging the foundational notice dated 29.06.2021 issued under Section 148 of the Income-tax Act, 1961 (unamended law), the subsequent notice dated 26.05.2022 issued under Section 148A(b), the order dated 27.07.2022 passed under Section 148A(d), and the consequential notice dated 27.07.2022 issued under Section 148.

The petitioner contended that the notices and the order were jurisdictionally flawed, time-barred under Section 149, contrary to Section 151A and CBDT notification dated 29 March 2022, based on vague and extraneous material, and passed in violation of principles of natural justice, including denial of oral hearing and cross-examination.

Issues Involved

Whether the reassessment proceedings initiated for Assessment Year 2014–15 were barred by limitation under Section 149 in light of settled judicial precedents, whether the impugned notices and order under Sections 148 and 148A were sustainable, and whether the matter required reconsideration by the Assessing Officer applying the correct legal position.

Petitioner’s Arguments

The petitioner submitted that the issue stood covered by the settled position of law laid down by the Supreme Court in Union of India vs. Rajeev Bansal, by the Delhi High Court in Ram Balram Buildhome Pvt. Ltd. vs. Income Tax Officer, and by the Madhya Pradesh High Court in Sandeep Singh Saluja vs. Income Tax Department. It was argued that applying the settled legal position to the facts of the case, the impugned notices dated 29.06.2021 and 26.05.2022, the order dated 27.07.2022, and the consequential notice were liable to be set aside.

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 arising for consideration and to pass appropriate orders keeping in view the settled position of law.

Court Order / Findings

The Delhi High Court noted that the controversy raised by the petitioner required examination in light of the settled legal position 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. 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 had been 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 notices or 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/1769595617_SWADESHITUBESLTD.VsASSISTANTCOMMISSIONEROFINCOMETAXCIRCLE222NEWDELHI.pdf

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