Cadence Real Estates Private Limited Vs ITO & Anr (Delhi High Court)
Delhi High Court has quashed a reassessment notice and subsequent proceedings initiated by the Income Tax Department against Cadence Real Estates Private Limited for the assessment year (AY) 2016-17. The court’s decision, delivered in a writ petition, centered on a critical procedural lapse: the reassessment notice was issued without the prior approval of the statutorily mandated authority.
The ruling aligns with a series of recent High Court judgments that have clarified the strict requirements for initiating reassessment proceedings, particularly in the aftermath of the Supreme Court’s pronouncement in the Union of India & Ors. v. Ashish Agarwal case.
Case Background: Multiple Reassessment Attempts
Cadence Real Estates Private Limited, a real estate firm, originally filed its income tax return for AY 2016-17 on October 13, 2016, declaring an income of ₹4,40,910. The first attempt at reassessment came with a notice issued under Section 148 of the Income Tax Act, 1961, on April 23, 2021. This notice was issued under the reassessment provisions that were in force prior to March 31, 2021.
However, this initial Section 148 notice faced legal challenges from numerous taxpayers, including Cadence Real Estates. The Delhi High Court, in a batch of matters led by Mon Mohan Kohli v. Assistant Commissioner of Income Tax & Anr. (Neutral Citation No.: 2021:DHC:4181-DB), set aside these old-regime Section 148 notices on December 16, 2021. Other High Courts across India also issued similar orders.
