Delhi High Court - Orders
Ernst And Young Emeia Services Limited vs Assistant Commissioner Of Income Tax ... on 6 August, 2025
Author: V. Kameswar Rao
Bench: V. Kameswar Rao
$~8
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 11441/2025
ERNST AND YOUNG EMEIA SERVICES LIMITED .....Petitioner
Through: Mr. Kamal Sawhney, Mr. Nikhil
Agarwal, Mr. Nishank Vashistha,
Advs.
versus
ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE
INTERNATIONAL TAX 1 2 2 DELHI .....Respondent
Through: Mr. Indruj Singh Rai, SSC, Mr.
Sanjeev Menon, JSC, Mr. Rahul
Singh, JSC, Mr. Gaurav Kumar, Mr.
Tanishq Ahuja, Advs.
CORAM:
HON'BLE MR. JUSTICE V. KAMESWAR RAO
HON'BLE MR. JUSTICE VINOD KUMAR
ORDER
% 06.08.2025 CM APPL. 46798/2025(Exemption)
1. Exemption is allowed, subject to all just exceptions.
2. The application stands disposed of.
W.P.(C) 11441/2025
3. Issue notice. Notice is accepted by learned counsel for the respondent.
4. This petition has been filed with the following prayers:
"(a) Issue a writ of certiorari, or any other appropriate writ or order quashing the Impugned Section 148A(1) Notice dated 30.03.2025 as well as Impugned Order issued under Section 148A(3) and the Impugned Notice issued under Section 148 both dated 30.06.2025, and all consequential proceedings.
(b) For such further and other reliefs, including costs of This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 15/08/2025 at 23:00:52 this Petition, as this Hon'ble Court may deem fit and proper in the nature and circumstances of the case.
(c) Award the costs of this Writ Petition in favour of the Petitioner and against Respondents."
5. The petitioner impugnes notice dated 30.03.2025 which has been issued under Section 148A(1) of the Income Tax Act, 1961 (the Act) as well as the impugned order under Section 148A(3) of the Act so also the notice issued on 30.06.2025 under Section 148 of the Act.
6. The submission of Mr. Kamal Sawhney, learned counsel appearing for the petitioner is by drawing our attention to Page 125 of the paper book to contend that for a different Assessment Year (AY) 2018-19, on an identical issue notice has been issued calling upon the petitioner to show- cause as why proceedings under Section 147 of the Act be not initiated against it. Even in the present AY of 2019-20 notice as well as order and a notice under Section 148 of the Act have been issued on an identical ground that an amount of ₹562,53,12,499/- has escaped the assessment and initiated the reassessment proceedings.
7. It is his case that the assessee has claimed that the aforesaid income is exempt from tax and as such, the same cannot be a ground to re-open the assessment.
8. He relies upon the judgement in the case of Ernst And Young Emeia Services Limited vs. Assistant Commissioner Of Income Tax Circle- International Tax-1-2-2, Delhi : 2025:DHC:2124-DB, for the AY 2018-19 whereby the notice issued to the petitioner and the proceeding initiated against the petitioner have been set aside. He also states that this Court had relied upon the judgement in the case of Banyan Real Estate fund Mauritius vs. ACIT & Anr. : 2024 SCC Online, Delhi 5312.
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 15/08/2025 at 23:00:52
9. In order to sustain the proposed reopening, it was incumbent upon the respondent to have formed an opinion that the financial transaction was in fact liable to be taxed under the act and thus resulting in income having escaped assessment.
10. He also submits that the case of the respondent/revenue that as the proceedings of reassessment have been initiated pursuant to the Risk Management Strategy under Section 148(3), of the Act, it was mandatory for the Assessing Officer to initiate proceedings for the reassessment is misplaced as the issue also stands settled by this Court in the case of Springer Healthcare Ltd. v. Assistant Commissioner of Income tax & Anr : 2025:DHC:4802-DB, wherein, this Court has in Para 26 and 27 held as under:
"26. The contention advanced on behalf of the Revenue is founded on interpreting Explanation I as a mandatory command to issue a notice under Section 148 of the Act notwithstanding the issue flagged under the audit objection has been subject matter of the examination in assessment proceedings and a final decision in terms of an assessment order. This requires us to examine Section 148 of the Act in the light of the import of word "information" as used in the main provision.
27. The term "information" is used in the first proviso to Section 148 of the Act. The said proviso proscribes issuance of notice under Section 148 of the Act unless there is "information" with the AO, which suggests that an assessee's income chargeable to tax has escaped the assessment for the relevant AY. Thus, if the AO is in receipt of an audit objection, the same is required to be construed as information that suggests that the income of the assessee has escaped assessment. The proviso to Section 148 of the Act is couched in the negative. Whilst, the AO is proscribed from issuance of the notice under Section 148 of the Act, unless it has the "information" that suggests that the assessee's income has escaped assessment, it is not mandatory for the AO to issue such a notice, or to review the assessment order merely because issues were flagged in an audit objection. The AO is required to apply its mind to the audit objection and form an independent, informed view."
11. According to him, the Assessing Officer while initiating the re-
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 15/08/2025 at 23:00:52 assessment proceedings has to apply his mind on the information received from risk management strategy which concedingly, has not been done in the present case.
12. He states that in the given circumstances the prayer for stay of the proceedings sought in the application need to be granted till the disposal of this petition.
13. On the other hand learned counsel for the revenue would submit that the submissions made by Mr. Kamal Sawhney on Section 148(3) of the Act are misplaced as that the revenue is within its right to start the reassessment proceedings based on the information contained in Clauses (i) to (vi) of Section 148(3) of the Act.
14. It is his submission that in the present case the re-assessment proceedings have been initiated in terms of Section 148(3)(i) of the Act on the basis of information received from risk management strategy, so the Assessing Officer has rightly initiated the proceedings for reassessment.
15. He states that the reliance placed on the judgment of Banyan Real Estate(supra) and also Springer Healthcare Ltd.(supra) is misplaced as they have no applicability to the facts of this case.
16. In any case he submits that the plea that the provisions of Section 148(3) of the Act are mandatory in as much as the Assessing Officer is bound by the information received from the risk management strategy to re- initiate the re-assessment proceedings which plea was not advanced in the Banyan Real Estate(supra). Insofar as the judgment in the case of Springer Healthcare Ltd(supra) is concerned, the same is distinguishable on facts as it was a case where the reassessment proceedings which were quashed, were initiated on the basis of an audit report and not the basic Risk Management This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 15/08/2025 at 23:00:52 Strategy as such the impugned action which has been taken by the respondent is justified.
17. Having heard the learned counsel for the parties, we are of the view that pending hearing of the writ petition, the proceedings which have been initiated in terms of the order passed under Section 148A(3) of the Act and also under Section 148 of the Act both dated 30.06.2025 shall remain stayed during the pendency of these proceedings.
18. Let the counter affidavit be filed within four weeks. Rejoinder thereto, if any, be filed within two weeks thereafter.
19. Renotify on 08.10.2025.
V. KAMESWAR RAO, J VINOD KUMAR, J AUGUST 06, 2025 rt This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 15/08/2025 at 23:00:52