Delhi High Court – Orders
Sarita Gupta vs Income Tax Department on 9 April, 2026
$~6
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 13142/2024, CM APPL. 54921/2024, CM APPL.22752/2026
& CM APPL.22753/2026
SARITA GUPTA .....Petitioner
Through: Mr. Chander Kant Tyagi, Adv.
versus
INCOME TAX DEPARTMENT .....Respondent
Through: Mr. Shlok Chandra, SSC with Ms.
Naincy Jain, Ms. Madhavi Shukla &
Mr. Udit Dad, Advs.
CORAM:
HON'BLE MR. JUSTICE DINESH MEHTA
HON'BLE MR. JUSTICE VINOD KUMAR
ORDER
% 09.04.2026
1. By way of the present writ petition, the petitioner has challenged the
assessment order passed under Section 147 of the Income Tax Act, 1961
(hereinafter referred to as ‘the Act of 1961’) dated 03.06.2024 inter alia on
two basic counts:-
i) Before passing the final assessment order under Section 147 of
the Act of 1961, the Assessing Officer (AO) has not issued any draft
assessment order.
ii) The approval granted by the Principal Commissioner of Income
Tax, Delhi-10 (PCIT) (hereinafter referred to as ‘the Competent
Authority’) under Section 151 of the Act of 1961 was not in
accordance with law.
2. Being prima-facie satisfied by the petitioner’s first contention, a
coordinate Bench of this Court had granted indulgence to the petitioner on
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19.09.2024, while observing thus:
“1. We take note of the averments made in paragraph 45 of
the writ petition in which it has been asserted that no draft
assessment order was framed prior to the passing of the
final order.
2. It is in the aforesaid context that learned counsel submits
that provisions of Section 144B under the Income Tax Act,
1961 have been violated.
3. In view of the aforesaid, let Mr. Chandra, learned
counsel
appearing for the respondent, obtain instructions.”
3. Ms. Naincy Jain, learned Junior Standing Counsel at the outset
submitted the assertions made by the petitioner are factually incorrect or
misconceived inasmuch as the petitioner itself had filed before the Court, the
draft assessment order-being Show Cause Notice dated 27.03.2024. She read
the entire notice and submitted that this is nothing but a draft assessment
order, as is evident from the recital made therein.
4. While highlighting that said notice was received by the petitioner, she
argued that the same falls well within the meaning of a draft assessment
order, as envisaged under Section 144B of Act of 1961.
5. In relation to the second argument, learned counsel for the petitioner
invited the Court’s attention towards page 26 of the additional documents
filed by the petitioner and underscored that the Principal Chief
Commissioner of Income Tax, Delhi (hereinafter referred to as ‘PCCIT’)
had simply written words ‘Approved. Fit case’.
6. He submitted that such inscription/order/note made by the PCCIT
cannot be said to be a proper application of mind for a valid approval, as has
been held by this Court in the case of Capital Broadways Pvt. Ltd. v.
Income Tax Officer Ward 5(3) Delhi & Anr. decided on 03.10.2024,
(NC:2024:DHC:7597-DB) in W.P.(C) 4303/2017.
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7. In response, Ms. Naincy Jain took the Court through page 26 to 28 of
the additional documents and submitted that the Competent Authority had
made the following note/remark for approval:
“On the basis of reasons recorded by the Assessing Officer
and observations of the Addl. Commissioner of Income
Tax, I am satisfied that it is a fit case for reopening u/s 148
of the Income Tax Act, 1961.”
8. She submitted that the inscription made by the Competent Authority
not only shows proper application of mind but also shows that the approval
granted by PCCIT is in accordance with law.
9. In support of her contention, learned counsel cited an order dated
28.02.2025 passed in ITA 25/2022 titled as Pr. Commissioner of Income
Tax Delhi-04 v. M/S Ganesh Ganga Investments Pvt. Ltd and submitted
that after dealing with the Capital Broadways (supra), the Division Bench
has held that the expression ‘Yes, I am satisfied’ written by PCIT is
sufficient to show application of mind and falls within the ambit of proper
approval. In this regard she read the relevant para 13, which we reporduce
hereinfra :
“13. It is relevant to note that Capital Broadways was
concerned with a case where all that the PCIT had chosen
to pen was ”Yes, I am satisfied”. That is clearly not the
position which obtains here. Regard must also be had to
the consistent position that our Court has taken in this
respect and where it has held that it is only where the
approving authority merely appends its signature or
accords approval treating that exercise to be an empty
formality or where it may have failed to discharge the
salutary obligation placed upon it and acted as a mere
rubber stamp that courts have struck down the approval
accorded. Regard must also be had to the fact that while
according approval, the PCIT is neither obliged nor
expected to pen a detailed order in support of the view
expressed by the AO. An approval even if succinctly
expressed would suffice provided it is demonstrative of duePage 3 of 6
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application of mind.”
10. She further submitted that in the instant case, Ms. Jyoti, Chief
Commissioner of Income Tax-1, Delhi (hereinafter referred to as ‘CCIT’)
had written the following note:
“In view of the aforesaid facts recommended for kind
approval of the draft order u/s l48A(d) of the Act and
subsequent issuance of notice u/s 148 of the Act. Submitted
for your kind perusal and approval please.”
11. She further pointed towards the remark of the PCCIT who wrote:
” “A” m 5/N approved. Fit case.”
12. She submitted that if the notings made by both CCIT and PCCIT are
read together, it leaves no room for ambiguity that the approval is valid in
eye of law.
13. Having heard learned counsel for the parties, we are of the view that
so far as the first issue is concerned that no draft assessment order was
served upon the petitioner is factually incorrect and the assessee’s
contention is untenable in law.
14. The show cause notice dated 27.03.2024 may not contain the
expression ‘draft assessment order’, but a perusal thereof clearly shows that
it is nothing short of a draft assessment order. While issuing the notice and
calling upon the petitioner-assessee to file its response, the authority issuing
the notice had clearly proposed what he proposed to assess and had also
clearly indicated that in case no satisfactory reply is given, he shall finalize
the assessment order in terms of the proposition/stipulation given in the
notice.
15. Section 144B of the Act of 1961 provides for a draft assessment order
and the same has to be gathered from the tenor of the notice or proposed
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assessment order. The absence of magic word or expression “Draft
Assessment Order”, since not prescribed in the Act or Rules, is not even
procedural lapse, let alone an error of substance.
16. According to us, the show cause notice dated 27.03.2024 is sufficient
compliance of Section 144B of the Act of 1961 and therefore, petitioner’s
such ground of attack to the assessment order hardly holds any water.
17. Adverting to the petitioner’s other argument that the approval in
question is not in accordance with law, we are of the view that the
expression noted by us in para Nos. 10 and 11 particularly the inscriptions
noted by the CCIT and the PCCIT that ‘it is a fit case’ is enough reflection
of application of mind and the same is indicative of a proper approval.
18. We, therefore, do not find any substance in any of the two arguments
advanced for the petitioner.
19. At this juncture, learned counsel for the petitioner submitted that there
are various inconsistencies and illegalities in the assessment order as well.
We refuse to entertain such aspect, as such exercise is in the nature of fact
finding inquiry which cannot be undertaken by this Court in its jurisdiction
under Article 226 of the Constitution of India.
20. The petition is thus, dismissed. Pending applications are disposed of
accordingly.
21. Since we have considered only the jurisdictional aspect and dismissed
the writ petition, we hereby clarify that the petitioner shall be at liberty to
file an appeal within a period of thirty days (on the merit of the additions
made). In case the appeal is preferred on or before 10.05.2026, the
appropriate appellate authority shall consider (only the merit of the
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additions/disallowance) in accordance with law, without raising any
objection with regard to limitation.
DINESH MEHTA, J
VINOD KUMAR, J
APRIL 9, 2026/ss
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