Income Tax Act | No Error In Issuing Successive Reassessment Notices On Same 'Reasons To Believe': Delhi High Court
The Delhi High Court has refused to interfere with income reassessment action initiated by the tax authorities merely on the ground that two successive notices under Section 148A(1) of the Income Tax Act 1961 were issued to the assessee.A division bench of Justices V. Kameswar Rao and Vinod Kumar observed,“as the fresh notice dated 13.06.2025 was issued with the same contents, the...
The Delhi High Court has refused to interfere with income reassessment action initiated by the tax authorities merely on the ground that two successive notices under Section 148A(1) of the Income Tax Act 1961 were issued to the assessee.
A division bench of Justices V. Kameswar Rao and Vinod Kumar observed,
“as the fresh notice dated 13.06.2025 was issued with the same contents, the previous notice automatically becomes infructuous. Thus, no jurisdictional issue arises.”
Briefly put, the Department issued a notice dated 29.03.2025 under Section 148A (1) to the petitioner, alleging that various dummy/shell entities/companies and bank accounts were associated with the petitioner, resulting in income escapement.
The Petitioner objected that 'reason to believe' relied upon by the respondent-authority is wrong and that prima-facie no relation of petitioner is established with the transactions carried through bank accounts and dummy/shell entities/companies.
Meanwhile, respondent again issued a notice dated 13.06.2025 under Section 148 A(1) stating that Petitioner's income chargeable to tax has escaped assessment.
Petitioner argued that the subsequent notice was issued without first withdrawing the notice dated 23.03.2025 and that respondent wrongly presumed that various bank accounts were operated by the petitioner.
It was argued that the respondent is duty bound to first withdraw the notice dated 23.03.2025 and only after that it can issue fresh notice under Section 148 of the Act.
Petitioner further argued that impugned notice suffers from fundamental infirmity i.e. two different sets of 'reasons to believe' have been furnished by way of notice dated 13.06.2025 and 29.03.2025 which violate the very essence of Section 147.
Respondent-authority on the other hand submitted that Petitioner's contention that two different sets of 'reasons to believe' were furnished was both factually incorrect and legally misconceived.
Respondents submitted that the original 'reasons to believe' were passed on the intelligence received from DDIT (investigation) regarding transactions with dummy entities amounting to Rs.24806728/-. This formed the core foundation for the proposed reassessment proceedings and the subsequent verification through bank records and GST data analysis did not introduce new grounds, rather the same corroborated and strengthened the initial intelligence.
In other words, it argued that there was no change or substitution of recorded reasons rather the subsequent notice was purely explanatory and did not introduce any fresh ground for reopening.
Agreeing, the High Court said,
“We also do not find any substance in the argument that first the Revenue should have withdrawn the notice dated 29.03.2025 and only thereafter the notice dated 13.06.2025 could have been issued.
Perusal of the record shows that the notice dated 13.06.2025 was issued under Section 148 A(1) of the Act requiring the petitioner to show cause as to why a notice under Section 148 of the Act should not be issued. Through this notice, the respondent was also requested to submit his reply along with supporting documents. The prior notice dated 29.03.2029 was also issued under Section 148 A (1) of the Act with the same contents.”
The Court added that all facts were clearly stated in the notice and there was no ambiguity causing any prejudice to the petitioner to put forward his defense.
“In our opinion it is not a case of change of opinion. Further, nothing has been shown by the petitioner to show that the Assessing Officer has no jurisdiction to issue notice under Section 148(1) of the Act or the notice suffers from any inherent defect,” the Court said and dismissed the plea.
Appearance: Mr. Karan Singh and Mr. Rohit Agarwal, Advocates for Petitioner; Mr. Abhishek Maratha, SSC, Mr.Apoorv Agarwal, Mr. Parth Samwal, JSCs and Ms. Nupur Sharma, Mr. Gaurav Singh, Mr.Bhanukaran Singh Jodha, Ms. Muskan Goel, Mr.Himanshu Gaur and Mr. Nischay Purohit, Advocates for Respondent
Case title: Amandeep Singh Proprietor, Guru Kripa Enterprises v. Office Of The Assistant Commissioner Of Income Tax Circle 10 (1)
Case no.: W.P.(C) 17047/2025