DCIT, Central Circle 1 vs Uppal Chadha Hi-Tech Developers Pvt. Ltd.

PER S.RIFAUR RAHMAN,AM:

This appeal is filed by the assessee against the order passed by the ld. Commissioner of Income-tax (Appeals), Delhi-23 [for short ‘ld. CIT (A)] dated 03.12.2025 for the Assessment Year 2009-10.

At the time of hearing, ld. AR of the assessee with the permission of the Bench brought to our notice relevant facts on record. In this regard, he brought to our notice page 145 of the paper book, the impugned order passed by the ld. CIT (A), Delhi-23, and brought to our notice the relevant findings at para 5 of the said order wherein ld. CIT (A) clearly brought on record that the core issue under consideration is notice issued under section 148 of the Income-tax Act, 1961 (for short ‘the Act’) dated 30.11.2023 for the impugned year is time barred. The relevant facts are, the Finance Act, 2021 had substantially amended the reassessment procedure u/s 147 to 151 w.e.f. 01.04.2021. Under the old regime i.e. prior to 01.04.2021, section 149 (1)(b) allowed the Assessing Officer to issue notice u/s 148 of the Act within four years but not more than six years from the end of the relevant assessment year, provided the escaped income was Rs.1 lakh or more than Rs.1 lakh. For the impugned year, the six years period from the end of the relevant AY i.e. 31.03.2010 would have expired on 31.03.2016. Ld. CIT (A) reproduced the relevant provisions of section 149 of the Act at pages 4 & 5 of the impugned order. Ld. CIT (A) also reproduced the First Proviso to section 149 (1) which states that no notice u/s 148 or 153A or 153C could not have been issued at that time on account of being beyond the time limit specified under section 149(1)(b) of the Act, as they stood immediately before the commencement of Finance Act, 2021. Since the case of the assessee squarely falls under the First Proviso to section 149(1) of the Act. Further without prejudice to the above findings of the ld. CIT (A), he, further, proceeded to adjudicate as such the case of the assessee falls u/s 149(1)(b) of the Act. He observed that as per the amended provisions, the notice for the impugned assessment year should have been issued on or before 31.03.2019 whereas in the present case, notice was issued on 30.11.2023. Therefore, the amended provisions are not applicable in the present case. Based on the above findings, he decided the case in favour of the assessee by holding that notice issued u/s 148 is without jurisdiction. In order to reach the above findings, he relied on the decision of Hon’ble Delhi High Court in the case of ARN Infrastructure India Limited vs. ACIT (WP (C) 1892/2024).

Aggrieved with the above order, Revenue is in appeal before us.

At the time of hearing, ld. AR brought to our notice that there was a search and seizure operation u/s 132 of the Act carried out in Chadha Group of cases and based on the material found in their case, proceedings u/s 153C of the Act was initiated in the case of the assessee and accordingly assessment order was passed on 28.03.2014. Aggrieved, assessee preferred an appeal before the ld. CIT(A), Delhi-30 and after considering the detailed submissions of the assessee, ld. CIT (A) decided the issue in favour of the assessee on jurisdictional issue that there is no incriminating document relied upon in the satisfaction note recorded u/s 153C of the Act. Accordingly, he decided the issue in favour of the assessee. Aggrieved, Revenue filed an appeal before ITAT and coordinate Bench vide order in ITA No. 5003/Del/2015 order dated 15.09.2017 dismissed the appeal preferred by the Revenue. Further, he submitted that the Revenue preferred an appeal before the Hon’ble Delhi High court against the order of ITAT and Hon’ble Delhi High Court has decided the issue in favour of the assessee.

At the time of hearing, ld. AR submitted that the reasons recorded for reopening the case in the impugned assessment order is exactly the same on which ITAT and Hon’ble High Court has decided the issue u/s 153C of the Act even though the issue was decided on jurisdictional issue. Further, he submitted that the issue under consideration is exactly same on merits. The Assessing Officer has reopened the assessment on same exact issue after the period of limitation by reopening the same by misinterpreting the amended provisions of section 148 of the Act.

On the other hand, ld. DR of the Revenue brought to our notice detailed findings of the Assessing Officer and submitted that the Assessing Officer has reopened the assessment on the basis of escapement of income. Therefore, he relied on the same.

Considered the rival submissions and material placed on record. We observed that the issue raised by the Assessing Officer on merits was already the core issue on the proceedings u/s 153A read with section 153C of the Act. The reason for initiating the proceedings u/s 147 are exactly same on which proceedings u/s 153C initiated earlier was decided in favour of the assessee by the appellate authorities and Hon’ble High Court. On the same issue, proceedings were initiated u/s 148 of the Act beyond the period of limitation as prescribed in amended provisions of section 149 (1) of the Act. In order to initiate the proceedings under amended provisions of section 149(1), the notice u/s 148 should have been issued on or before 31.03.2019 whereas the notice was issued on 30.11.2023. Apart from that, the explicit First Proviso to section 149 (1) clearly indicates that similar to the facts in the present case, no notice u/s 148 can be issued under provisions of section 149(1) beginning on or after 01.04.2021. Therefore, we do not see any reason to disturb the findings of the ld. CIT (A). Accordingly, the grounds raised by the Revenue are dismissed.

In the result, the appeal filed by the Revenue is dismissed.