Bhagwan Sahai Sharma Vs DCIT (Delhi High Court)
Delhi High Court has set aside a reassessment notice issued under Section 148 of the Income Tax Act, 1961, to Bhagwan Sahai Sharma for the Assessment Year (AY) 2017-18. The court’s decision hinges on the fundamental procedural requirement that such notices, especially when issued beyond a certain timeframe, must receive prior approval from a specifically designated higher authority, a condition found to be unfulfilled in this case.
The petitioner, a 72-year-old senior citizen, had challenged the notice dated July 29, 2022. This notice was preceded by an order under Section 148A(d) of the Act, which itself followed a prior notice dated June 29, 2021. The earlier notice, originally issued under the pre-Finance Act, 2021, reassessment regime, was deemed a show cause notice under Section 148A(b) of the Act, in accordance with the Supreme Court’s landmark decision in Union of India & Ors. v. Ashish Agarwal ((2023) 1 SCC 617).
The factual background reveals that the petitioner, who derives income primarily from salary from his auto parts company, filed his income tax return for AY 2016-17 on August 5, 2017, declaring an income of Rs. 73,34,600/-. The reassessment proceedings specifically related to AY 2017-18.
