Facts of the Case

The present batch of writ petitions involved Jindal Exports and Imports Private Limited and Kiran Credits Private Limited, who challenged the legality of reassessment proceedings initiated by the Income Tax Department.

The dispute arose from:

  • Notices issued under Section 148A(b) of the Income Tax Act, 1961
  • Orders passed under Section 148A(d) of the Act

The notices were issued in relation to Assessment Years 2013–14 and 2014–15.

A crucial factual aspect was that:

  • The notices under Section 148A(b) were dated 02.06.2022 but were served via email on 08.06.2022, i.e., after the prescribed timeline.

The petitioners argued that such notices had lost legal validity due to delayed communication.

 Issues Involved

  1. Whether notices issued under Section 148A(b) but served after the prescribed time limit are legally sustainable.
  2. Whether such notices violate the CBDT Instruction No. 1/2022 dated 11.05.2022.
  3. Whether failure to mention the name and designation of the issuing authority violates Section 282A of the Income Tax Act.
  4. Whether consequential orders under Section 148A(d) can survive if the foundational notice is invalid.

 Petitioner’s Arguments

  • The notices dated 02.06.2022 became ineffective after 03.06.2022, as per CBDT instructions.
  • The notices were actually served on 08.06.2022, making them time-barred and invalid.
  • The procedure mandated by the Supreme Court in Union of India vs Ashish Aggarwal (2022) and CBDT instructions was not followed.
  • The notices did not contain name and designation of the issuing officer, violating Section 282A.
  • Consequently, the entire reassessment proceedings were vitiated.

 Respondent’s Arguments

  • The Revenue contended that the notices were issued within time and procedural compliance was maintained.
  • It was argued that reassessment proceedings were valid under the amended provisions of the Income Tax Act.

 Court’s Findings / Order

  • The CBDT Instruction No. 1/2022 mandated that information/material must be provided within 30 days, i.e., by 02.06.2022.
  • Notices served after this date defeated the purpose of the statutory timeline.
  • The impugned notices sent on 08.06.2022 were therefore invalid and unsustainable.
  • Additionally, failure to mention the name and designation of the issuing officer violated Section 282A.
  • The Court relied on its earlier decision in LSR Medical Pvt. Ltd. vs DCIT (2023), where similar notices were quashed.

 Final Order:

  • Notices under Section 148A(b) and orders under Section 148A(d) were set aside.
  • Writ petitions were allowed.
  • Liberty granted to Revenue to proceed in accordance with law.

 Important Clarifications

  • Mere issuance of notice is not sufficient; proper and timely service is mandatory.
  • CBDT instructions issued pursuant to Supreme Court rulings are binding on tax authorities.
  • Any procedural lapse, especially relating to limitation and service, can invalidate reassessment proceedings.
  • Compliance with Section 282A (authentication of notices) is essential.

 Sections Involved

  • Section 147 – Income escaping assessment
  • Section 148 – Issue of notice for reassessment
  • Section 148A(b) – Show cause notice before reassessment
  • Section 148A(d) – Order after considering reply
  • Section 151 – Sanction for issue of notice
  • Section 282A – Authentication of notices

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

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