Facts of the Case

  • The petitioners, namely Jindal Exports and Imports Pvt. Ltd. and Kiran Credits Pvt. Ltd., filed writ petitions challenging reassessment proceedings initiated by the Income Tax Department.
  • Notices under Section 148 were originally issued in April–June 2021.
  • Subsequently, notices under Section 148A(b) were issued on 02.06.2022 but were delivered on 08.06.2022.
  • Petitioners filed replies within stipulated timelines.
  • Thereafter, orders under Section 148A(d) were passed on 30.07.2022.
  • Petitioners contended that the notices were invalid due to delay and procedural defects.

Issues Involved

  1. Whether notices under Section 148A(b) issued/delivered beyond the prescribed timeline are valid in law?
  2. Whether violation of CBDT Instruction No. 1/2022 renders reassessment proceedings invalid?
  3. Whether absence of name and designation of issuing authority violates Section 282A?
  4. Whether consequential orders under Section 148A(d) can survive if the initial notice is invalid?

Petitioner’s Arguments

  • The notices under Section 148A(b), though dated 02.06.2022, were served after 03.06.2022, thereby losing legal efficacy.
  • CBDT Instruction No. 1/2022 mandated that material must be provided within 30 days i.e., by 02.06.2022.
  • Delay in communication renders the entire reassessment proceedings void.
  • Notices were defective as they did not contain name and designation of the issuing authority, violating Section 282A.
  • Consequently, orders under Section 148A(d) based on such defective notices are unsustainable.

Respondent’s Arguments

  • The Revenue contended that reassessment proceedings were conducted in accordance with law and in compliance with the Supreme Court judgment in Union of India vs Ashish Aggarwal.
  • It was argued that procedural compliance was substantially met and reassessment should not be invalidated on technical grounds.

Court’s Findings / Order

  • The Delhi High Court held that:
    • Notices under Section 148A(b) lost efficacy after 03.06.2022, as per CBDT Instruction.
    • Delivery of notices on 08.06.2022 was beyond the permissible timeline, making them invalid.
    • Notices violated Section 282A since they did not disclose name and designation of issuing officer.
  • The Court relied on its earlier decision in:
    • LSR Medical Pvt. Ltd. vs DCIT (2023) (similar issue decided in favour of assessee).
  • Accordingly:
    • Notices under Section 148A(b) and orders under Section 148A(d) were set aside.
    • Writ petitions were allowed.
    • Liberty was granted to Revenue to proceed in accordance with law.

Important Clarification

  • Strict adherence to CBDT timelines is mandatory, not directory.
  • Service of notice is crucial — mere issuance within time is insufficient.
  • Non-compliance with Section 282A (authentication requirements) renders notice invalid.
  • Reassessment proceedings must strictly follow procedural safeguards introduced under the new reassessment regime post Ashish Aggarwal.

 Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/60826072023CW62172023_153603.pdf

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