Garima Vikas Vs Union of India (Delhi High Court)
New Reassessment Law Cannot Rewrite an Old Search: Search Before 01.09.2024 Permits Direct Section 148 Notice Without Section 148A Procedure
Summary: The Delhi High Court has held that where a search was conducted between 01.04.2021 and 31.08.2024, reassessment proceedings would continue to be governed by Sections 147 to 151 as they stood immediately before the amendments introduced by the Finance (No. 2) Act, 2024.
Consequently, where information relating to the assessee was found during a search conducted on a third party on 04.01.2024, the AO was legally entitled to issue notice directly u/s 148 without first following the procedure prescribed u/s 148A(b), 148A(c) & 148A(d). The fact that the reassessment notice was issued only on 24.03.2025, after Explanation 2 to Section 148 had been omitted, did not alter the position because the transitional provision contained in Section 152(3) preserved the old reassessment regime based upon the date of search.
Direct Section 148 Notice Based on Bhutani Group Search
The assessee challenged a reassessment notice dated 24.03.2025 issued for AY 2021-22 and the consequential assessment order dated 21.03.2026.
The reassessment proceedings were initiated on the basis of information allegedly found during a search conducted in the case of the Bhutani Group on 04.01.2024.
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