Facts of the Case

The petitioners, Jindal Exports and Imports Pvt. Ltd. and Kiran Credits Pvt. Ltd., challenged the legality of reassessment proceedings initiated by the Income Tax Department.

The challenge was specifically directed against:

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

The reassessment notices under Section 148 were originally issued in 2021. Subsequently, in compliance with the Supreme Court ruling in Union of India vs Ashish Agarwal, such notices were treated as show cause notices under Section 148A(b).

However, the Assessing Officer provided the information/material relied upon after the prescribed deadline (02.06.2022), i.e., on 08.06.2022.

The petitioners contended that such delayed communication rendered the notices invalid.

Issues Involved

  1. Whether notices issued under Section 148A(b) after the prescribed timeline are legally valid?
  2. Whether violation of CBDT Instruction No. 1/2022 invalidates reassessment proceedings?
  3. Whether absence of officer’s name/designation in notices violates Section 282A?

Petitioner’s Arguments

  • The notices under Section 148A(b) were time-barred, as the material was provided after 02.06.2022, contrary to CBDT instructions.
  • Once the deadline expired, the notices lost legal efficacy and could not be acted upon.
  • The impugned notices also violated Section 282A, as they did not mention the name and designation of the issuing authority.
  • Consequently, the subsequent order under Section 148A(d) was also invalid.

Respondent’s Arguments

  • The Revenue argued that reassessment proceedings were valid and in compliance with the Supreme Court’s directions in Ashish Agarwal.
  • It was contended that procedural aspects should not invalidate the proceedings where substantive compliance exists.

Court’s Findings / Order

  • The Court held that CBDT Instruction No. 1/2022 clearly mandated that information and material must be supplied within 30 days (i.e., by 02.06.2022).
  • Since the notices were emailed on 08.06.2022, they were beyond the permissible time limit.
  • Such delay violated the binding CBDT instructions and the statutory scheme.
  • Additionally, failure to mention the name and designation of the officer violated Section 282A.
  • The Court relied on its earlier judgment in LSR Medical Pvt. Ltd. vs DCIT (WP(C) 5129/2023).

Final Order:

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

Important Clarification

  • Compliance with CBDT Instructions is mandatory, not merely procedural.
  • Delay in providing material under Section 148A(b) can invalidate the entire reassessment process.
  • Notices must strictly comply with Section 282A, including proper authentication.

Sections Involved

  • Section 148 – Income escaping assessment
  • Section 148A(b) – Show cause notice before reassessment
  • Section 148A(d) – Order deciding whether reassessment is required
  • Section 151 – Sanction for issuance 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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