The Delhi High Court has set aside an order passed under Section 148A(3) of the Income Tax Act, 1961, along with the consequential reassessment notice issued under Section 148, after finding that the Assessing Officer had failed to consider the taxpayer’s reply before initiating reassessment proceedings.
The decision was delivered in MS Kimpex Flow Private Limited (formerly known as M/s Kriti Tradeimpex) v. Deputy Commissioner of Income Tax, W.P.(C) 10119/2026, by a Division Bench comprising Justice Dinesh Mehta and Justice Rajneesh Kumar Gupta on 24 July 2026.
Background of the Case
The Income Tax Department issued a notice dated 31 March 2026 under Section 148A(1) of the Income Tax Act, calling upon the petitioner to submit its response regarding the proposed reopening of assessment.
The petitioner submitted its reply on 16 June 2026 through the Income Tax Department’s online portal. The filing of the reply was supported by a screenshot of the departmental portal.
However, the Assessing Officer subsequently passed an order dated 23 June 2026 under Section 148A(3) and issued a consequential notice under Section 148 on the same date. According to the petitioner, the order had been passed without considering or dealing with the reply already submitted on the portal.
The petitioner therefore approached the Delhi High Court contending that the reassessment proceedings were contrary to the principles of natural justice.
Department Did Not Dispute Non-Consideration of Reply
During the hearing, the Department’s counsel was unable to dispute that the petitioner had filed its reply on 16 June 2026.
The Department also did not dispute that the order passed under Section 148A(3) did not deal with or consider the petitioner’s response.
The Court observed that the Assessing Officer had proceeded to pass the impugned order and issue the reassessment notice without taking the taxpayer’s reply into account.
Delhi High Court’s Decision
The Delhi High Court held that the order under Section 148A(3), having been passed without considering the reply filed by the petitioner, could not be sustained.
Accordingly, the Court set aside:
- the order dated 23 June 2026 passed under Section 148A(3); and
- the consequential notice issued under Section 148 of the Income Tax Act.
The writ petition was allowed, and the pending applications were also disposed of.
Fresh Hearing Through Video Conferencing Directed
The Court directed the Assessing Officer to issue a fresh notice of hearing to the petitioner.
The Assessing Officer was further directed to provide a video-conferencing link so that the petitioner could make oral submissions, if desired.
After granting the petitioner an opportunity of hearing and considering its response, the Assessing Officer was directed to pass a fresh order in accordance with law.
Legal Principle Emerging from the Decision
The ruling reinforces that a reply filed by a taxpayer during proceedings under Section 148A must be genuinely considered before an order permitting reassessment is passed.
The statutory opportunity to respond cannot be reduced to an empty formality. An order that ignores the reply already filed by the taxpayer violates the principles of natural justice and is liable to be set aside.
The decision also highlights the importance of the Assessing Officer examining submissions uploaded on the departmental portal before initiating reassessment proceedings under Section 148.
Significance for Taxpayers and Professionals
Taxpayers facing reassessment proceedings should preserve acknowledgements, screenshots and other evidence showing that their replies were filed on the Income Tax portal within the prescribed time.
Where an order under Section 148A fails to refer to or deal with the taxpayer’s response, the absence of consideration may constitute a valid ground for challenging the reassessment proceedings.
The judgment is relevant for advocates, Chartered Accountants, tax consultants, corporate tax teams and taxpayers dealing with proceedings under Sections 148 and 148A of the Income Tax Act.
Case Details
Case: MS Kimpex Flow Private Limited, formerly known as M/s Kriti Tradeimpex v. Deputy Commissioner of Income Tax
Court: High Court of Delhi at New Delhi
Bench: Justice Dinesh Mehta and Justice Rajneesh Kumar Gupta
Case Number: W.P.(C) 10119/2026
Connected Applications: CM APPL. 47025/2026 and CM APPL. 47024/2026
Date of Decision: 24 July 2026
Relevant Provisions: Sections 148, 148A(1) and 148A(3) of the Income Tax Act, 1961
Decision: In favour of the taxpayer
Conclusion
The Delhi High Court quashed the reassessment order and consequential notice because the Assessing Officer had failed to consider the taxpayer’s reply filed on the Income Tax portal.
The Assessing Officer has been permitted to proceed afresh only after issuing a new hearing notice, providing a video-conferencing facility and granting the petitioner an effective opportunity to present its case.
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