Neeru Sehgal Vs PCIT (Delhi High Court)
Summary: The Delhi High Court quashed a notice dated 31.08.2024 issued to Mrs Neeru Sehgal under Section 148 of the Income Tax Act, 1961, holding that the notice sought to reopen the very same transaction and income that had already been subjected to earlier reassessment proceedings culminating in an assessment order dated 30.03.2025.
The petitioner challenged the impugned Section 148 notice on various grounds. Her principal contention was that proceedings under Section 148 had already been initiated for the very same reason and in respect of the very same transaction through an earlier notice dated 30.03.2024. Those proceedings had culminated in an assessment order dated 30.03.2025. The Revenue’s Senior Standing Counsel could not dispute this factual and legal position, though he contended that the writ petition suffered from delay and laches.
After examining the record, the High Court recorded that it had “no iota of doubt” that the impugned notice dated 31.08.2024 related to the same transaction for which the Assessing Officer had already initiated proceedings and passed the assessment order dated 30.03.2025.
The Court also rejected the Revenue’s objection regarding delay. It held that the impugned notice was fundamentally void and without jurisdiction. Since the petition had been filed within 18 months, the delay was not substantial enough to be fatal to maintainability.
On the substantive issue, the High Court held that the impugned notice was beyond the scope of Section 148 of the Income Tax Act, 1961. The income could not be regarded as having escaped assessment because it had already been brought to tax through the assessment order dated 30.03.2025. The subsequent notice therefore sought to tax the very same income which had already been taxed or sought to be taxed.
Accordingly, the Delhi High Court held the notice to be clearly illegal and liable to be quashed. The writ petition was allowed, the Section 148 notice dated 31.08.2024 was quashed, and all pending applications were disposed of.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. By way of present writ petition, the petitioner has challenged the notice dated 31.08.2024 issued under Section 148 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act of 1961’) on various grounds, including the ground that for the very same reason and in respect of the very same transaction, proceedings under Section 148 of the Act of 1961were earlier initiated vide notice dated 30.03.2024 and culminated in an assessment order dated 30.03.2025.
2. Mr. Indruj Singh Rai, learned Senior Standing Counsel for the respondents could not dispute the aforesaid position of fact and law. He, however, submitted that the petition suffers from delay and laches.
3. Having heard learned counsel for the parties and on perusing the record, we have no iota of doubt that the impugned notice dated 31.08.2024 relates to the very same transaction, for which proceedings against the petitioner had been taken up by the Assessing Officer (AO) and the same had led to assessment order dated 30.03.2025.
4. So far as the question of delay is concerned, we find that the impugned notice is fundamentally void and without jurisdiction, and the petition has been filed within 18 months, the delay is thus not substantial to be fatal to the petition’s maintainability.
5. Furthermore, the impugned notice is beyond the scope of Section 148 of the Act of 1961, as the income has not escaped assessment, for it had already been brought to tax by way of above referred assessment order dated 30.03.2025. The impugned notice thus, seeks to tax the very same income, which has been taxed or was sought to be taxed. The notice is therefore, clearly illegal and liable to be quashed.
6. The writ petition is allowed. The impugned notice dated 31.08.2024 is hereby quashed.
7. Pending application(s) also stand disposed of.
