Facts of the Case

  • The petitioner challenged:
    • Order dated 20.07.2022 under Section 148A(d)
    • Notice issued under Section 148 for AY 2013–14
  • The Revenue alleged that the petitioner received bogus share premium and capital amounting to ₹69.93 crores through accommodation entries linked with BDR Group and S.K. Jain group entities.
  • The petitioner contended:
    • No such transaction occurred in the relevant assessment year
    • Transactions were undertaken by shareholders, not the assessee
  • Investigation reports and survey findings suggested:
    • The petitioner was part of a network engaged in layered transactions and accommodation entries
    • Share premium transactions lacked genuineness and creditworthiness

Issues Involved

  1. Whether reassessment proceedings for AY 2013–14 were barred by limitation under Section 149.
  2. Whether writ jurisdiction under Article 226 can be invoked in cases involving disputed facts.
  3. Whether reassessment based on investigation reports constitutes valid “reason to believe”.
  4. Applicability of TOLA, 2020 for extending limitation.

Petitioner’s Arguments

  • The alleged transaction of ₹69.93 crores was factually incorrect.
  • The petitioner had no involvement; transactions were between shareholders.
  • Proceedings were time-barred, as limitation expired on 31.03.2020.
  • Section 149 (as amended by Finance Act, 2021) barred reopening.
  • Relied on Union of India vs Ashish Agarwal (2022) to argue procedural invalidity.

Respondent’s Arguments

  • TOLA extended limitation period till 30.06.2021, making notice valid.
  • Investigation revealed:
    • Petitioner received bogus share capital/share premium
    • Part of BDR Group providing accommodation entries
  • Reassessment justified based on material evidence and investigation reports
  • Writ petition not maintainable due to disputed questions of fact

Court Findings / Judgment

  • The Court held:
    • Disputed facts cannot be adjudicated under writ jurisdiction.
    • There was prima facie material justifying reassessment.
    • Reliance placed on:
      • Raymond Woollen Mills Ltd. vs ITO – sufficiency of material not to be examined at notice stage
      • CIT vs Chhabil Dass Agarwal – alternative remedy doctrine
  • On limitation:
    • TOLA validly extended limitation till 30 June 2021
    • Notice dated 29.06.2021 was within limitation
    • Section 149 amended provisions not applicable retrospectively in this case

Final Order

  • Writ Petition Dismissed
  • Reassessment proceedings upheld
  • Assessing Officer directed to decide matter independently on merits

Important Clarifications by Court

  • Writ jurisdiction is not appropriate where facts are disputed
  • At reassessment stage:
    • Only existence of prima facie material is required
  • TOLA extension is valid and applicable
  • Observations in order shall not prejudice final assessment proceedings

 Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2022:DHC:3711-DB/58909092022CW131022022_190826.pdf

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