Hari Bhoomi Communications Private Limited Vs ACIT (Delhi High Court)
In this case, the petitioner challenged an assessment order dated 25.03.2026 issued pursuant to a notice under the Second Explanation to Section 148 of the Income Tax Act, 1961. The notice had been issued on the basis of material recovered during a search conducted at the premises of M/s Kuantum Papers Limited.
The petitioner argued that proceedings against the searched person, namely M/s Kuantum Papers Limited, had already been stayed by the Punjab and Haryana High Court by order dated 18.02.2026. According to the petitioner, once the search proceedings against the searched person were stayed and prima facie treated as illegal, proceedings initiated against the petitioner based on the same search material could not continue. It was also argued that while the searched person was not facing assessment proceedings, the petitioner had been subjected to an assessment order arising from the same search.
The petitioner further contended that proceedings had been initiated specifically under the Second Explanation to Section 148, which applies in cases involving search. Therefore, if the search itself was ultimately declared illegal, the foundation of the proceedings against the petitioner would fail and the assessment order would become invalid. The petitioner relied upon decisions of the Delhi High Court and Bombay High Court in Shah E Naaz Judge and Echjay Industries Pvt. Ltd. respectively.
