Delhi District Court
Milani Company vs New Delhi Municipal Council on 3 June, 2025
IN THE COURT OF DISTRICT JUDGE-05, NEW DELHI
DISTRICT, PATIALA HOUSE COURTS, NEW DELHI
House Tax Appeal No: 34/2018
IN THE MATTER OF : -
Milani Company
Proprietor Vijay Bala Kapur,
E-135, Greater Kailash-I,
New Delhi - 110048.
.......... Appellant
VERSUS
New Delhi Municipal Council
Property Tax Department
Parliament Street,
New Delhi - 110001.
.......... Respondent
APPEAL UNDER SECTION 115 of the NDMC Act, 1994
Date of institution : 03.10.2018
Date when judgment reserved : 26.05.2025
Date of Judgment : 03.06.2025
JUDGMENT:-
1. Vide this judgment, I shall decide the present appeal filed by the appellant against the Assessment Order dated 22.02.2018 passed by the respondent.
2. It is pertinent to mention here that initially the appellant has filed the appeal against the Bill No. 219625 HTA No. 34/18 Page 1 of 9 Milani Company Vs. NDMC Judgment dated 03.06.2025 dated 02.09.2018 pursuant to the Assessment Order dated 22.02.2018 under Section 115 of the NDMC Act. The appellant was supplied the Assessment Order on 16.01.2024 in the present court proceedings. Consequently, the appellant moved an application under Order 6 Rule 17 CPC seeking amendment in the appeal for assailing the Assessment Order dated 22.02.2018. The said application was not opposed by the respondent and, accordingly, amended appeal was taken on record.
3. It is stated by the appellant that she is an individual and property in question is in the name of Milani Company owned by her. The property in question bearing No. 6B, Atma Ram House, 1, Tolstoy Marg, New Delhi was assessed to rateable value of Rs. 47,500/- per annum being self occupied. The said property was self occupied till May 2007 and thereafter it was rented out in favour of M/s Ansal Buildwell Ltd. w.e.f. 04.07.2007 for a period of 03 years on monthly rent of Rs. 1,33,000/-. The property was vacated by the said tenant w.e.f. 17.03.2009 intimation of which was given to the respondent. The property remained vacant and unoccupied for the period 17.03.2009 to 30.09.2009. Again the property was rented out to M/s EBC Publishing Pvt. Ltd. w.e.f. 01.10.2009 for a period of 05 years at a monthly rent of Rs. 1,00,000/- for a period three years and, thereafter, at the rate of Rs. 1,20,000/- per month for the next two years. The respondent was accordingly informed about the same. After the expiry of the term of the tenancy, the tenant has not vacated the premises nor the rent agreement has been renewed HTA No. 34/18 Page 2 of 9 Milani Company Vs. NDMC Judgment dated 03.06.2025 further. It is stated that the respondent issued a letter dated 10.10.2011 calling for more documents and subsequently the appellant visited the respondent and filed the details. It is stated that there is no change in the status of the property and the property is subject to property tax under Unit Area Method. The appellant is regularly paying the property tax as raised by the respondent. It is further stated that the appellant had received the bill bearing No. 122252 dated 11.12.2013 for the Assessment Year 2013-14 claiming the payable amount of Rs. 9517/- for the Assessment Year 2013-14. The payment was accordingly made. Further, another bill bearing No. 141010 dated 18.09.2014 for the Assessment Year 2014-15 was sent and the amount was paid by the appellant. It is contended that the Assessment Order has never been passed but the bill No. 219625 dated 02.09.2018 for Rs. 40,14,272/- has been sent without the computation but with the arrears. Hence, the present appeal.
4. The appellant has assailed the Assessment Order dated 02.09.2018 on the grounds that the bill in question is bad in law and contrary to the provisions of NDMC Act; the property was self occupied till June 2007 and has been rented out subsequently; the proposed revision on the basis of comparable rent was ultra vires as the necessary information regarding property being self occupied and later on rented out has been duly given to the respondent; the Assessment Order on the basis of comparable rent is not permissible under law; the RV of the property as proposed by the respondent is highly exorbitant, arbitrary and illegal and without application HTA No. 34/18 Page 3 of 9 Milani Company Vs. NDMC Judgment dated 03.06.2025 of mind, the impugned order has been passed on incorrect interpretation of by-laws; the property was liable to be assessed on the basis of self occupied basis which the Assessing officer has failed to do. Hence, it is prayed that bill dated 219625 dated 02.09.2018 and Assessment Order dated 22.02.2018 may be set aside.
5. The respondent has filed reply to the appeal contending that the appeal is without any merit. The appellant was served a notice under Section 72 of the NDMC Act by which it was proposed to increase the rateable value which was not replied by the appellant and in the absence of the same, rateable value of the property was increased. It is further contended that the appeal has been filed to avoid the tax liability and the same is hopelessly time barred because the Assessment Order dated 22.02.2018 is sought to be challenged in the year 2025 in the garb of the plea that the copy was not supplied. The other contents are stated to be wrong and denied and the respondent has prayed for dismissal of the appeal.
6. I have heard the Ld. Counsel for the parties and have perused the record carefully.
7. At the outset, objection of the respondent that the appeal is time barred is required to be dealt with.
8. The respondent has contended that the Assessment Order dated 22.02.2018 is sought to be challenged in the year 2025 and, therefore, the appeal is time barred having been filed after expiry of 7 years of the passing of the Assessment HTA No. 34/18 Page 4 of 9 Milani Company Vs. NDMC Judgment dated 03.06.2025 Order.
9. A perusal of the record shows that the appellant has filed the present appeal on 01.10.2018 by which Bill No. 219625 dated 02.09.2018 for Rs. 3,09,100/- raised by the respondent was challenged. The appellant has contended that the Assessment Order has not been served by the respondent upon the appellant and the appellant has only received the Bill dated 02.09.2018 making the demand. In view of the same, the appeal against the levy/demand raised vide Bill dated 02.09.2018 was filed within time. The appellant was served with the copy of Assessment Order during the course of proceedings in this Court on 16.01.2024 and consequently the appellant amended the appeal by incorporating the facts challenging the Assessment Order 22.02.2018. Therefore, it cannot be said that the present appeal filed in the year 2025 against the Assessment Order passed on 22.02.2018 is time barred.
10. Now, coming to the merits of the present appeal.
11. The Ld. Counsel for the appellant has vehemently argued that the impugned Assessment Order dated 22.02.2018 in respect of the notice dated 22.02.2002 is time barred as same has been decided after a delay of 16 years. He further submitted that the respondent has failed to appreciate that the property was self occupied till June 2007 and rented out subsequently which was duly notified to the respondent. He further argued that the respondent was not entitled to increase the rateable value of the property on the basis of comparable HTA No. 34/18 Page 5 of 9 Milani Company Vs. NDMC Judgment dated 03.06.2025 rent when the property is self occupied and rented out which has been duly intimated from time to time. He further argued that there is no rationale for enhancing the rateable value of the property in question and the impugned Assessment Order has been passed on the basis of surmises and conjectures and is liable to the set aside. He has relied upon Ved Marwah & Ors. Vs. NDMC & Ors, W.P. (C) 188/2018, C.M. APPL..772/2018, date of decision 23.03.2018 by the Hon'ble High Court of Delhi.
12. The Ld. Counsel for the respondent has vehemently contended that there is no delay in passing the impugned order. The objections were filed by the appellant to the notice under Section 72 of the NDMC Act and the same were dealt with. He submitted that the assessee was not supplying the rental information and therefore the delay in passing the assessment order cannot be attributed to the respondent. He further submitted that there is no provision in the NDMC Act to decide the notice under Section 72 within a particular period and the assessing authority has to decide the same within a reasonable period. He submitted that the appeal is liable to be dismissed as the assessment order is well reasoned and calls for no interference of this court.
13. The appellant has assailed the assessment order dated 22.02.2018 issued under Section 72 of the NDMC Act by which three notices were decided i.e. notices dated 22.02.2002, 31.03.2008 and 19.03.2014 by which the rateable value has been proposed to be revised to Rs.4,06,700/- w.e.f.
HTA No. 34/18 Page 6 of 9Milani Company Vs. NDMC Judgment dated 03.06.2025 01.04.2001 to 03.07.2007 and Rs. 14,36,400/- w.e.f. 04.07.2007. The impugned Assessment Order dated 22.02.2018 under Section 72 of the NDMC Act would further show that the notice dated 22.02.2002 by which proposed RV was Rs. 4,51,930/- less 10% we.f.. 01.04.2001 on the basis of market rent; and the notice dated 31.03.2008 of proposed RV of Rs. 14,36,400/- w.e.f. 04.07.2007 on the basis of actual rent and another notice dated 29.03.2014 for proposed RV of Rs. 11,76,100/- w.e.f. 01.04.2013 on the basis of market rent were given. Vide the impugned Assessment Order, the notices issued on 22.02.2002 and 31.03.2008 have been finalized while the notice dated 19.03.2014 has been kept pending subject to outcome of SLP pending in the Hon'ble Supreme Court of India. As such, the impugned order dated 22.02.2018 has decided the notices dated 22.02.2002 and 31.03.2008 given under Section 72 of the NDMC Act.
14. A perusal of the impugned assessment order further shows that the reason assigned for increasing the proposed rateable value w.e.f. 01.04.2001 is on the comparable rent basis which the property might be reasonably expected be let from year to year and the reason for increasing the rateable value regarding the notice dated 31.03.2008 is based on the actual rent basis.
15. The aforesaid proceedings would show that the notices dated 22.02.2002 and 31.03.2008 have been decided by the respondent after a gap of 16 and 10 years respectively. It has been held in Ved Marwah and others vs. NDMC and others by the Hon'ble Delhi High Court that the proceedings HTA No. 34/18 Page 7 of 9 Milani Company Vs. NDMC Judgment dated 03.06.2025 initiated pursuant to the notice under Section 72 of the NDMC Act should be concluded in a reasonable period of not more than 3 years. In the said case, the notices for revising the assessment list were issued over a decade prior to passing of the final orders by the NDMC. The Hon'ble High Court has held that the inordinate delay was unreasonable and quashed the assessment order.
16. In the present case, there is an inordinate delay on the part of respondent/NDMC in finalizing the assessment. The initial notices under Section 72 of the NDMC Act were issued on 22.02.2002 and 31.03.2008 while the final assessment order has been passed on 22.02.2018 i.e. after a gap of more than 16 years and 10 years between the issuance of initial notices and finalization of assessment order. As such, in view of the observations made in Ved Marwah by the Hon'ble High Court of Delhi, the delay in finalizing the assessment is inordinate and arbitrary. For the above reasons, the impugned assessment order cannot be sustained. The impugned assessment order passed after the huge delay of 16 years and 10 years is bad in law and is liable to be set aside.
17. In view of the aforesaid discussion, the appeal is allowed and the impugned assessment order dated 22.02.2018 is set aside. However, as observed by the Hon'ble Delhi High in Ved Marwah, the respondent/NDMC is at liberty to rework the assessment by issuing a fresh notice to the appellant from the period commencing from three years prior to the date on which the final notice was issued/assessment order passed and finalize the assessment within a reasonable time.
HTA No. 34/18 Page 8 of 9Milani Company Vs. NDMC Judgment dated 03.06.2025
18. File be consigned to record room after due compliance.
Digitally signed BALWANT by BALWANT RAI BANSAL Announced in the open Court RAI Date: on 3rd June, 2025 BANSAL 2025.06.04 16:26:48 +0530 (Balwant Rai Bansal) District Judge-05 (New Delhi District) Patiala House Courts, New Delhi HTA No. 34/18 Page 9 of 9 Milani Company Vs. NDMC Judgment dated 03.06.2025