Madras High Court
M/S.Jeans Brand Factory vs Deputy Commissioner Of Income Tax on 10 February, 2026
Author: C.Saravanan
Bench: C.Saravanan
W.P.Nos.33409, 33411 and 33414 of 2023
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 10.02.2026
CORAM :
THE HONOURABLE MR.JUSTICE C.SARAVANAN
W.P.Nos.33409, 33411 and 33414 of 2023
and
W.M.P.Nos.33130, 33133, 33136, 33138, 33140 and 33142 of 2023
M/s.Jeans Brand Factory,
Represented by its Partner
S.Hemavathy
... Petitioner in all W.Ps
Vs.
Deputy Commissioner of Income Tax,
Central Circle – 2(4),
Chennai – 600 034. ... Respondent in all W.Ps
Prayer in W.P.No.33409 of 2023: Writ Petition filed under Article 226
of the Constitution of India, for issuance of a Writ of Certiorari, to call
for the records pertaining to the impugned Assessment Order dated
30.03.2023 bearing DIN ITBA/AST/M/147/2022-23/1051710704(1)
purportedly issued under Section 144 read with Section 147 of the
Income Tax Act, 1961 for the Assessment Year 2016-17, by the
Respondent and quash the same.
Prayer in W.P.No.33411 of 2023: Writ Petition filed under Article 226
of the Constitution of India, for issuance of a Writ of Certiorari, to call
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W.P.Nos.33409, 33411 and 33414 of 2023
for the records pertaining to the impugned Assessment Order dated
30.03.2023 bearing DIN ITBA/AST/M/147/2022-23/1051711149(1)
purportedly issued under Section 144 read with Section 147 of the
Income Tax Act, 1961 for the Assessment Year 2017-18, by the
Respondent and quash the same.
Prayer in W.P.No.33414 of 2023: Writ Petition filed under Article 226
of the Constitution of India, for issuance of a Writ of Certiorari, to call
for the records pertaining to the impugned Assessment Order dated
30.03.2023 bearing DIN ITBA/AST/M/147/2022-23/1051710910(1)
purportedly issued under Section 144 read with Section 147 of the
Income Tax Act, 1961 for the Assessment Year 2018-19, by the
Respondent and quash the same.
For Petitioner : Mrs.T.V.Muthu Abirami
(In all W.Ps)
For Respondent : Mr.A.P.Srinivas
(In all W.Ps) Senior Standing Counsel
and Mr.A.N.R.Jayaprathap
Junior Standing Counsel
COMMON ORDER
By this Common Order, all these Writ Petitions are being
disposed of.
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W.P.Nos.33409, 33411 and 33414 of 2023
2. In these Writ Petitions, the Petitioner has challenged the
impugned Assessment Orders all dated 30.03.2023 passed for the
Assessment Year 2016-2017, 2017-2018 and 2018-2019 under Section
144 read with Section 147 of the Income Tax Act, 1961.
3. The undisputed facts of the case are that for all the
aforesaid Assessment Years, the Petitioner was issued with a Notice all
dated 01.04.2021 under Section 148 of the Act under the old regime as
in force till 31.03.2021.
4. These Section 148 Notices dated 01.04.2021 issued under
the old regime as in force till 31.03.2021 ultimately culminated in the
Assessment Orders dated 30.03.2022 for all the aforesaid Assessment
Years against the Petitioner has preferred appeals before the
Commissioner of Income Tax (Appeals) under Section 246A of the
Act.
5. Meanwhile, the Hon’ble Supreme Court delivered its
verdict in Union of India Vs. Ashish Agarwal., (2024) SCC Online
SC 2693 on 04.05.2022, which was later clarified by the Hon’ble
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W.P.Nos.33409, 33411 and 33414 of 2023
Supreme Court in Union of India Vs. Rajeev Bansal, 2024 SCC
Online SC 2993.
6. In Paragraph No.28 from Ashish Agarwal case (cited
supra), the Hon’ble Supreme Court held as under:-
28. In view of the above and for the reasons stated
above, the present Appeals are allowed in part. The
impugned common judgments and orders passed by
the High Court of Judicature at Allahabad in W.T. No.
524/2021 and other allied tax appeals/petitions, is/are
hereby modified and substituted as under:
(i) The impugned section 148 notices issued to the
respective assessees which were issued under
unamended section 148 of the IT Act, which were the
subject matter of writ petitions before the various
respective High Courts shall be deemed to have been
issued under section 148A of the IT Act as substituted
by the Finance Act, 2021 and construed or treated to
be showcause notices in terms of section 148A(b). The
assessing officer shall, within thirty days from today
provide to the respective assessees information and
material relied upon by the Revenue, so that the
assessees can reply to the showcause notices within
two weeks thereafter;
(ii) The requirement of conducting any enquiry, if
required, with the prior approval of specified authority
under section 148A(a) is hereby dispensed with as a4/19
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W.P.Nos.33409, 33411 and 33414 of 2023onetime measure visàvis those notices which have
been issued under section 148 of the unamended Act
from 01.04.2021 till date, including those which have
been quashed by the High Courts. Even otherwise as
observed hereinabove holding any enquiry with the
prior approval of specified authority is not mandatory
but it is for the concerned Assessing Officers to hold
any enquiry, if required;
(iii) The assessing officers shall thereafter pass orders
in terms of section 148A(d) in respect of each of the
concerned assessees; Thereafter after following the
procedure as required under section 148A may issue
notice under section 148 (as substituted);
(iv) All defences which may be available to the
assesses including those available under section 149
of the IT Act and all rights and contentions which may
be available to the concerned assessees and Revenue
under the Finance Act, 2021 and in law shall continue
to be available.
7. In the Union of India Vs. Rajeev Bansal, 2024 SCC
Online SC 2993, the above decision of the Hon’ble Supreme Court in
Ashish Agarwal case (cited supra) was re-examined. The Hon’ble
Supreme Court framed the following questions of law / issues in
Paragraph No.18. Paragraph No.18 from Rajeev Bansal case (cited
supra) is reproduced below:-
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W.P.Nos.33409, 33411 and 33414 of 2023“(a) Whether the Taxation and other Laws
(Relaxation and Amendment of Certain
Provisions) Act, 2020 and notifications issued
under it will also apply to reassessment notices
issued after April 1, 2021; and
(b) Whether the reassessment notices issued under
section 148 of the new regime between July and
September 2022 are valid.”
8. The above questions of law / issues have been answered in
Paragraph No.114 and illustrated in Paragraph No.112 of Rajeev
Bansal case (cited supra).
9. For the sake of clarity, Paragraph Nos.112 and 114 from
Rajeev Bansal case (cited supra) are extracted hereunder:-
“112. Let us take the instance of a notice issued on
May 1, 2021 under the old regime for a relevant
assessment year. Because of the legal fiction, the
deemed show-cause notices will also come into effect
from May 1, 2021. After accounting for all the
exclusions, the Assessing Officer will have sixty-one
days (days between May 1, 2021 and June 30, 2021) to
issue a notice under section 148 of the new regime.
This time starts ticking for the Assessing Officer after
receiving the response of the assessee. In this instance,
if the assessee submits the response on June 18, 2022,6/19
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W.P.Nos.33409, 33411 and 33414 of 2023the Assessing Officer will have sixty one days from
June 18, 2022 to issue a reassessment notice under
section 148 of the new regime. Thus, in this
illustration, the time limit for issuance of a notice
under section 148 of the new regime will end on
August 18, 2022.
114. In view of the above discussion, we conclude
that:
(a) After April 1, 2021, the Income Tax Act has to be
read along with the substituted provisions;
(b) Taxation and other Laws (Relaxation and Amendment
of Certain Provisions) Act, 2020 will continue to apply to
the Income-tax Act after April 1, 2021 if any action or
proceeding specified under the substituted provisions of
the Income Tax Act falls for completion between March
20, 2020 and March 31, 2021;
(c) Section 3(1) of the Taxation and other Laws
(Relaxation and Amendment of Certain Provisions) Act,
2020 overrides section 149 of the Income-tax Act only to
the extent of relaxing the time limit for issuance of a
reassessment notice under section 148;
(d) Taxation and other Laws (Relaxation and Amendment
of Certain Provisions) Act, 2020 will extend the time
limit for the grant of sanction by the authority specified
under section 151. The test to determine whether
Taxation and other Laws (Relaxation and Amendment of
Certain Provisions) Act, 2020 will apply to section 151
of the new regime is this : if the time limit of three years
from the end of an assessment year falls between March
20, 2020 and March 31, 2021, then the specified
authority under section 151(i) has extended time till June7/19
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W.P.Nos.33409, 33411 and 33414 of 202330, 2021 to grant approval;
(e) In the case of section 151 of the old regime, the test is
: if the time limit of four years from the end of an
assessment year falls between March 20, 2020 and
March 31, 2021, then the specified authority under
section 151(2) has extended time till March 31, 2021 to
grant approval;
(f) The directions in Union of India Vs. Ashish Agarwal
[(2022) 444 ITR 1 (SC); (2023) 1 SCC 617] will extend
to all the ninety thousand reassessment notices issued
under the old regime during the period April 1, 2021
and June 30, 2021;
(g) The time during which the show- cause notices were
deemed to be stayed is from the date of issuance of the
deemed notice between April 1, 2021 and June 30, 2021
till the supply of relevant information and material by
the Assessing Officers to the assessees in terms of the
directions issued by this court in Union of India Vs.
Ashish Agarwal [(2022) 444 ITR 1 (SC); (2023) 1 SCC
617], and the period of two weeks allowed to the
assessees to respond to the show-cause notices; and
(h) The Assessing Officers were required to issue the
reassessment notice under section 148 of the new regime
within the time limit surviving under the Income-tax Act
read with the Taxation and other Laws (Relaxation and
Amendment of Certain Provisions Act, 2020. All notices
issued beyond the surviving period are time barred and
liable to be set aside;
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W.P.Nos.33409, 33411 and 33414 of 2023
10. Following the ratio of the Hon’ble Supreme Court in
Ashish Agarwal case (referred supra), the Petitioner was issued with a
Notice dated 01.06.2022 under Section 148A(b) of the Act under the
new regime as in force with effect from 01.04.2021, which culminated
in Section 148A(d) order dated 29.07.2022 and a Notice dated
29.07.2022 under Section 148 of the Act, which has now culminated in
the impugned assessment orders dated 30.03.2023.
11. The challenge to the impugned Assessment Orders dated
30.03.2022 is primarily on the ground that once the assessment was
completed and an order was passed under Section 147 read with
Section 144 of the Act, the issuance of Section 148A(b) Notice under
the new regime as in force with effect from 01.04.2021 in the light of
the aforesaid decisions of the Hon’ble Supreme Court cannot be
justified.
12. Learned counsel for the Petitioner has placed reliance on
the decision of this Court in M/s.Merton Vs. The Deputy
Commissioner of Income Tax, Chennai and another in
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W.P.Nos.33409, 33411 and 33414 of 2023
W.P.No.26782 of 2022 vide Order dated 22.01.2025 wherein in
Paragraph Nos.3 and 4, the Court held as under:-
“12. The issue was examined by the Assessing Officer
which has culminated in an Assessment Order dated
30.03.2022. The decision of the Hon’ble Supreme
Court in Ashish Agarwal’s case (cited supra), has
summarized the position as under:-
“28. In view of the above and for the reasons stated
above, the present appeals are allowed in part.
The impugned common judgments and orders
[Ashok Kumar Agarwal v. Union of India,
2021 SCC OnLine All 799] passed by the High
Court of Judicature at Allahabad in WT No.
524 of 2021 and other allied tax
appeals/petitions, is/are hereby modified and
substituted as under:
28.1. The impugned Section 148 notices issued to
the respective assessees which were issued
under unamended Section 148 of the IT Act,
which were the subject-matter of writ petitions
before the various respective High Courts
shall be deemed to have been issued under
Section 148-A of the IT Act as substituted by
the Finance Act, 2021 and construed or
treated to be show-cause notices in terms of
Section 148-A(b). The assessing officer shall,
within thirty days from today provide to the
respective assessees information and material
relied upon by the Revenue, so that the
assessees can reply to the show-cause notices
within two weeks thereafter.
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W.P.Nos.33409, 33411 and 33414 of 2023
28.2. The requirement of conducting any enquiry, if
required, with the prior approval of specified
authority under Section 148-A(a) is hereby
dispensed with as a one-time measure vis-à-vis
those notices which have been issued under
Section 148 of the unamended Act from 1-4-
2021 till date, including those which have
been quashed by the High Courts.
28.3. Even otherwise as observed hereinabove
holding any enquiry with the prior approval of
specified authority is not mandatory but it is
for the assessing officers concerned to hold
any enquiry, if required.
28.4. The assessing officers shall thereafter pass
orders in terms of Section 148-A(d) in respect
of each of the assessees concerned; Thereafter
after following the procedure as required
under Section 148-A may issue notice under
Section 148 (as substituted).
28.5. All defences which may be available to the
assessees including those available under
Section 149 of the IT Act and all rights and
contentions which may be available to the
assessees concerned and Revenue under the
Finance Act, 2021 and in law shall continue
to be available.
29. The present order shall be applicable PAN
INDIA and all judgments and orders passed
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W.P.Nos.33409, 33411 and 33414 of 2023
by the different High Courts on the issue and
under which similar notices which were issued
after 1-4-2021 issued under Section 148 of the
Act are set aside and shall be governed by the
present order and shall stand modified to the
aforesaid extent. The present order is passed
in exercise of powers under Article 142 of the
Constitution of India so as to avoid any
further appeals by the Revenue on the very
issue by challenging similar judgments and
orders, with a view not to burden this Court
with approximately 9000 appeals. We also
observe that the present order shall also
govern the pending writ petitions, pending
before various the High Courts in which
similar notices under Section 148 of the Act
issued after 1-4-2021 are under challenge.
30. The impugned common judgments and orders
[Ashok Kumar Agarwal v. Union of India,
2021 SCC OnLine All 799] passed by the High
Court of Allahabad and the similar judgments
and orders passed by various High Courts,
more particularly, the respective judgments
and orders passed by the various High Courts
particulars of which are mentioned
hereinabove, shall stand modified/substituted
to the aforesaid extent only.
31. All these appeals are accordingly partly allowed
to the aforesaid extent. In the facts of the case,
there shall be no order as to costs.
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W.P.Nos.33409, 33411 and 33414 of 2023
13. In my view, the aforesaid decision of the
Hon’ble Supreme Court in Ashish Agarwal’s
case (cited supra) has been passed under
Article 142 of the Constitution of India in view
of the peculiar circumstances arising out of
the amendment to the Income Tax Act, 1961
vide Finance Act, 2021. In order to put the
issue at rest, the Hon’ble Supreme Court had
given the above direction.
14. The Hon’ble Supreme Court has not given a
direction to the Assessing Officer to reopen
the assessment even when the assessment was
completed earlier by treating the notice issued
under Section 148 of the Income Tax Act,
1961 as the notice issued under Section
148A(b) of the Income Tax Act, 1961 as
amended with effect from 01.04.2021.”
The Court took note of the decision of the Hon’ble Supreme Court in
Ashish Agarwal’s case (cited supra).
13. Learned Senior Standing Counsel for the Respondent
however drew the attention of this Court to Paragraph Nos.99 and 100
from the subsequent decision of the Hon’ble Supreme Court in Union
of India Vs. Rajeev Bansal, 2024 SCC Online SC 2993 rendered on
03.10.2024.
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W.P.Nos.33409, 33411 and 33414 of 2023
14. It is submitted that although the decision of this Court in
M/s.Merton’s case (cited supra) was rendered after the decision of the
Hon’ble Supreme Court in Rajeev Bansal’s case (cited supra)
rendered on 03.10.2024, the impact of Paragraph Nos.99 and 100 was
not considered by this Court in M/s.Merton’s case (cited supra).
15. Therefore, it is submitted by the learned Senior Standing
Counsel for the Respondent that the impugned Assessment Orders do
not merit any interference. It is therefore submitted that at best the
Petitioner can be given liberty to workout the remedy before the
Appellate Authority in the manner known to law.
16. I have considered the arguments advanced by the learned
counsel for the Petitioner and the learned Senior Standing Counsel for
the Respondent.
17. In my view, the decision of this Court in M/s.Merton’s
case (cited supra) still holds good. Therefore, the impugned
Assessment Orders are liable to be interfered with.
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W.P.Nos.33409, 33411 and 33414 of 2023
18. Under similar circumstances, this Court in M/s.Anand
Cine Services Private Limited Vs. Assistant Commissioner of
Income Tax in W.P.No.16023 of 2022 vide Order dated 04.11.2025
has held as under:-
“16. It must be observed that once the
re-assessment proceedings initiated with issuance
of Section 148 Notice under the old regime as in
force till 30.06.2021 has already been completed
on the earlier set of facts with the issuance of an
Assessment Order dated 28.03.2022 under Section
147 of the Act based on the earlier set of facts, the
Department cannot reopen the assessment on the
basis of the decision of the Hon’ble Supreme court
in Ashish Agarwal case (cited supra).
17. The principle laid down in Ashish
Agarwal case (cited supra) and Rajeev Bansal
case (cited supra) applies only in cases where the
assessment was yet to be completed and no
Assessment or Re-Assessment Order had been
passed earlier. Only in such cases, a fresh Notice
under Section 148A(b) of the Act under the new
regime as in force with effect from 01.04.2021
could be validly issued.
18. Even if the defense of the Petitioner
is a technical defense based on the decisions of the
Hon’ble Supreme Court in Ashish Agarwal case
(cited supra) and Rajeev Bansal case (cited
supra), the facts remains that the Return of
Income filed by the Petitioner on 28.11.2014 was
already the subject matter of an Assessment Order
dated 28.03.2022 for the Assessment Year 2014-15/19
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W.P.Nos.33409, 33411 and 33414 of 2023
2015. Such an assessment cannot be recalled by
issuance of a fresh Notice under Section 148A(b)
of the Act.”
19. That apart, in Paragraph Nos.99 and 100 in Rajeev
Bansal’s case (cited supra), the Hon’ble Supreme Court observed that
reassessment proceedings erroneously initiated by the Revenue under
the old regime were not wiped out from its existence. The fall out of
the above reasonings in Paragraph No.100 from the decision of the
Hon’ble Supreme Court in Rajeev Bansal’s case (cited supra) is that
after the proceedings that were initiated earlier under the old regime
and where no Assessment Orders were passed then within the time
frame prescribed in Rajeev Bansal’s case (cited supra) read with
Ashish Agarwal’s case (cited supra), a fresh Notice could be issued
and within such period of limitation in Section 153 of the Act,
Assessment Orders could be passed.
20. However, after an Assessment Order has already been
passed, there is no scope for reigniting the proceedings afresh as the
purpose of reassessment proceedings under Section 148 of the Act
whether under the old regime or under the new regime are one and the
same.
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W.P.Nos.33409, 33411 and 33414 of 2023
21. Under the old regime, an assessee could file a Return of
Income after issuance of Section 148 Notice and thereafter seek
reasons for reopening of the assessment in terms of the decision of the
Hon’ble Supreme Court in GKN Driveshafts (India) Limited Vs.
Income Tax Officer, (2003) 1 SCC 73. However, a new regime is in
force with effect from 01.04.2021.
22. Whichever way one looks at, once an order has been
passed, there is no scope for issuance of a fresh Notice under Section
148A(b) of the Act to issue Notice under Section 148 of the Act to pass
a fresh order once again.
23. Therefore, these Writ Petitions deserve to be allowed and
are accordingly allowed. No costs. Connected Writ Miscellaneous
Petitions are closed.
10.02.2026
Neutral Citation : Yes / No
arb
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W.P.Nos.33409, 33411 and 33414 of 2023
To:
Deputy Commissioner of Income Tax,
Central Circle – 2(4),
Chennai – 600 034.
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W.P.Nos.33409, 33411 and 33414 of 2023C.SARAVANAN, J.
arb
W.P.Nos.33409, 33411 and 33414 of 2023
and
W.M.P.Nos.33130, 33133, 33136, 33138, 33140 and 33142 of 202310.02.2026
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