Allowed

Sms Packers Private Limited v. Assistant Commissioner of Income Tax Central Circle 8 Delhi & Ors.

Delhi HC3 Mar 2025W.P.(C)/2625/2025

Case brief

AI extract

What is this about?

A writ petition challenged a Section 148 income-tax reassessment notice for AY 2015-16 on the ground that it exceeded the Section 149 time-limit. Relying on its earlier decision in ARN Infrastructures India Ltd., and with the Revenue concurring, the court held the notice unsustainable and set it aside.

What did the court decide?

Impugned Section 148 notice dated 25.04.2024 for AY 2015-16 set aside; pending applications disposed of.

Sms Packers Private Limited Vs Assistant Commissioner of Income Tax… — Income Tax | Delhi HC (2025)

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$~71

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IN THE HIGH COURT OF DELHI AT NEW DELHI

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W.P.(C) 2625/2025, CM APPL. 12485/2025 & CM APPL. 12486/2025

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SMS PACKERS PRIVATE LIMITED .....Petitioner

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Through: Mr. Ved Jain, Mr. Nischay Kantoor and Ms. Soniya Dodeja, Advocates.

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versus

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ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 8 DELHI & ORS. .....Respondents

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Through: Mr. Ruchir Bhatia, SSC with Mr. Anand Mann, JSC and Ms. Aditi Sabharwal and Mr. Abhishek Anand, Advocates for Revenue.

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CORAM:

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HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE TUSHAR RAO GEDELA

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O R D E R % 03.03.2025

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The petitioner has filed the present petition, inter alia , impugning notice dated 25.04.2024 (hereafter the impugned notice ) issued under Section 148 of the Income Tax Act, 1961 (hereafter the Act ) in respect of assessment year (AY) 2015-16.

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The learned counsel appearing for the petitioner submits that the issue stands covered by the decision of this Court in ARN Infrastructures India Ltd. v. Assistant Commissioner of Income Tax Central Circle-28 Delhi & Ors.: Neutral Citation No.:2024:DHC:7423-DB.

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This Court in the case of ARN Infrastructures India Ltd. (supra) held as under:

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This is a digitally signed order.

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The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 07/03/2025 at 12:32:54

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“38. It is pertinent to note that a reference to Sections 147 and 148 of the Act in Abhisar Buildwell firstly appears in paragraph 33 of the report and where the Supreme Court observed that in cases where a search does not result in any incriminating material being found, the only remedy that would be available to the Revenue would be to resort to reassessment.

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39. However, the Supreme Court caveated that observation by observing that the initiation of reassessment would be “.....subject to fulfilment of the conditions mentioned in Sections 147/148, as in such a situation, the Revenue cannot be left with no remedy”. This sentiment came to be reiterated with the Supreme Court observing that the power of the Revenue to initiate reassessment must be saved failing which it would be left with no remedy. It was thereafter observed in paragraph 36.4 of the report that insofar as completed or unabated assessments were concerned, they could be reopened by the AO by invocation of Sections 147/148 of the Act, subject to the fulfillment of the conditions “......as envisaged/mentioned under Sections 147/148 of the Act and those powers are saved”.

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40. It thus becomes apparent that the liberty which the Supreme Court accorded and the limited right inhering in the Revenue to initiate reassessment was subject to that power being otherwise compliant with the Chapter pertaining to reassessment as contained in the Act. The observations of the Supreme Court cannot possibly be read or construed as a carte blanche enabling the respondents to overcome and override the restrictions that otherwise appear in Section 149 of the Act. The observations of the Supreme Court in Abhisar Buildwell were thus intended to merely convey that the annulment of the search assessments would not deprive or denude the Revenue of its power to reassess and which independently existed. However, the Supreme Court being mindful of the statutory prescriptions, which otherwise imbue the commencement of reassessment, qualified that observation by providing that such an action would have to be in accordance with law. This note of caution appears at more than one place in that judgment and is apparent from the Supreme Court observing that the power to reassess would be subject to the fulfilment of the conditions mentioned in Sections 147 and 148 of the Act.”

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Plainly, the controversy involved in this petition is covered by the decision of this court in ARN Infrastructures India Ltd. (supra) . The contention that the time-period as stipulated under Section 149 of the Act is not applicable, in the given facts, is erroneous and thus rejected.

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The learned counsel for the respondent concurs with the aforesaid view.

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This is a digitally signed order.

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The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 07/03/2025 at 12:32:54

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The petition is, accordingly, allowed and the impugned notice is set aside.

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Pending applications also stand disposed of.

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DEVENDRA KUMAR UPADHYAYA, CJ

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TUSHAR RAO GEDELA, J

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MARCH 3, 2025 kct

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This is a digitally signed order.

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The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 07/03/2025 at 12:32:54

Sms Packers Private Limited v. Assistant Commissioner of Income Tax Central Circle 8 Delhi & Ors.

Case brief

What is this about?

What did the court decide?

Sms Packers Private Limited v. Assistant Commissioner of Income Tax Central Circle 8 Delhi & Ors.

Case brief

What is this about?

What did the court decide?

What the court decided

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