Makemytrip India Private Limited Vs DCIT (Delhi High Court)
The Delhi High Court considered two writ petitions filed for Assessment Years 2020–21 and 2021–22, challenging reassessment proceedings initiated under the Income Tax Act, 1961. The petitions assailed (i) show cause notices dated 13.03.2025 issued under Section 148A(1), (ii) orders dated 29.06.2025 passed under Section 148A(3), and (iii) consequential notices of the same date issued under Section 148 of the Act.
The core grievance of the petitioner was that the show cause notices under Section 148A(1) were vague and failed to disclose the information or reasons suggesting that income chargeable to tax had escaped assessment. It was pointed out that the notices merely referred to a “search and seizure under section 132 on MLBEs of Insurance Sector (Ajay Mehta Group)” without explaining how this led to any escapement of income in the petitioner’s case. According to the petitioner, despite detailed replies explaining the nature and manner of receipt of amounts aggregating to ₹11,00,80,752 and ₹39,27,95,754 for the relevant assessment years, the Assessing Officer did not consider these explanations while passing the orders under Section 148A(3).
The petitioner further relied on the statutory scheme of Section 148A(1), contending that the provision itself mandates that a show cause notice must be accompanied by information suggesting escapement of income. In the absence of such information, the initiation of reassessment proceedings was argued to be contrary to law.
On behalf of the Revenue, it was submitted that the reassessment proceedings had been initiated pursuant to investigation material, and therefore the notices and orders issued under Sections 148A(1), 148A(3), and 148 were justified.
The High Court examined the impugned orders passed under Section 148A(3) and found that they did not disclose any reasons or grounds explaining why the Assessing Officer disagreed with the replies submitted by the petitioner. The Court noted that the orders were devoid of reasoning, particularly when viewed against the detailed stand taken by the petitioner in response to the show cause notices. In such circumstances, the Court held that the orders under Section 148A(3) and the consequential notices under Section 148 could not be sustained in law.
Accordingly, the Court set aside the orders dated 29.06.2025 passed under Section 148A(3) as well as the consequential notices issued under Section 148 for both assessment years. However, instead of finally quashing the proceedings, the Court remanded the matters back to the Assessing Officer with a direction to pass fresh, reasoned orders after duly considering the replies already filed by the petitioner to the notices under Section 148A(1).
The Court also took note of the petitioner’s contention, recorded in its replies dated 28.03.2025, that the notices issued were incomplete as they did not provide complete information. In this context, the Court clarified that the Assessing Officer must furnish the information that he proposes to rely upon while deciding the show cause notices under Section 148A(1). Upon receipt of such information, liberty was granted to the petitioner to file additional replies within a period of two weeks.
A time-bound direction was issued requiring the Assessing Officer to complete the entire exercise within eight weeks from the date of receipt of a copy of the Court’s order. The Court clarified that after the fresh order is passed, both parties would be at liberty to proceed in accordance with law.
With these directions, the writ petitions and pending applications were disposed of.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
These petitions [W.P.(C) 19288/2025 & W.P.(C) 19296/2025] have been filed by the petitioner in respect of Assessment Year (AY) 2021-22 and AY 2020-21, respectively with common prayers:-
“a) a writ in the nature of Certiorari, mandamus or any order appropriate writ for quashing of the Impugned Show Cause Notice dated 13.03.2025 issued under Section 148A(1) of the Act, Impugned Order dated 29.06.2025 issued under Section 148A(3) of the Act, Impugned Notice dated 29.06.2025 issued under Section 148 of the Act for the subject AY by the Respondents and all consequential proceedings thereto; and”
2. In effect, the challenge in these petitions is to the notices dated 13.03.2025 issued under Section 148A(1) of the Income Tax Act, 1961 (the Act); orders dated 29.06.2025 issued under Section 148A(3) of the Act; and notices of the same date under Section 148 of the Act in respect of relevant AYs.
3. Mr Sachit Jolly, learned Senior Counsel for the petitioner has drawn our attention to page no.45 of W.P.(C) 19288/2025 and page no. 37 of W.P.(C) 19296/2025 which are notices issued under Section 148A(1) of the Act to contend that they are vague notices and does not specify the reasons to allege that the income of the petitioner has escaped assessment except stating in paragraph no.3.1; “Search and seizure under section 132 on MLBEs of Insurance Sector (Ajay Mehta Group)”. He states that, the petitioner has given replies to the notices issued by the respondents specifying the reasons/manner of receipt of Rs.11,00,80,752/-and Rs.39,27,95,754/- but the same have not been considered by the Assessing Officer (AO) while passing the orders under Section 148A(3) of the Act; as such the notices under Section 148A(1); orders under Section 148A(3), and notices under Section 148 of the Act, need to be set aside.
4. In this regard, Mr Jolly has relied upon the provision of Section 148A(1) of the Act to contend that the provision itself contemplates that the notice to show cause shall be accompanied by the information, which suggest that the income chargeable to tax has escaped assessment in the relevant AY.
5. On the other hand, Mr Siddhartha Sinha, learned SSC appearing for the Revenue, would justify the notices which have been issued under Section 148A(1) of the Act; orders passed under Section 148A(3) of the Act; and notices issued under Section 148 of the Act, stating that, it is pursuant to the investigation that the proceedings have been initiated by the AO.
6. Suffice to state that, on a perusal of the orders passed under Section 148A(3) of the Act the same does not reveal the grounds/reasons on which the AO has disagreed with the replies filed by the petitioner, to issue notices under Section 148 of the Act. The same being devoid of reasons more particularly, considering the stand taken by the petitioner in its replies to notices under Section 148A(1) of the Act, the orders under Section 148A(3) dated 29.06.2025; the notices issued under Section 148 of the same date have to be held as unsustainable.
7. Accordingly, we deem it appropriate to set aside the impugned orders dated 29.06.2025 passed under Section 148A(3) of the Act; and the consequential notices dated 29.06.2025 issued under Section 148 of the Act (in both the petitions) and remand the matters back to the AO for passing reasoned orders, afresh on the basis of the replies given by the petitioner to the notices under Section 148A(1) of the Act.
8. We also make it clear that the petitioner in its replies dated 28.03.2025 has also stated that the notices issued by the respondents are incomplete as same does not provide complete information.
9. Suffice to state that the AO shall give the information which he intends to rely upon while deciding notices under Section 148A(1) of the Act. Liberty shall be with the petitioner to file additional reply(ies) within a period of two weeks from the date of receipt of such information from the AO. The AO shall complete the exercise in terms of this order within a period of eight weeks from the receipt of copy of the order. On passing of order, both the parties shall proceed in accordance with law.
10. The petitions are disposed. The pending applications are disposed of.
