High Court quashes Section 148A(3) order and Section 148 notice issued to Michael & Susan Dell Foundation, remanding the matter for fresh consideration within six weeks.
Meetu Kumari | Nov 18, 2025 |
Delhi HC Quashes Reassessment Notice for Mechanical Reopening of Case without Considering Taxpayer’s Reply
The Michael and Susan Dell Foundation, which operated only as a liaison office in India during FY 2017–18, challenged the reassessment proceedings initiated for AY 2019-20. A notice under Section 148A(1) dated 31.03.2025 alleged that the Foundation had made foreign remittances amounting to Rs. 1,87,84,530 (USD 2,93,070). The petitioner explained that this amount represented the closing balance in its liaison office bank account on 12.01.2018, the date on which the liaison office was closed, and that the funds were simply remitted back to its U.S. account. The Foundation had already filed its return, and the Revenue passed an assessment order dated 29.03.2024 accepting the income position.
Despite this, a fresh notice under Section 148A(1), followed by an order under Section 148A(3) on 29.06.2025 and a Section 148 notice, was issued on the same remitted amount. The petitioner argued that its explanation, already considered in the earlier assessment, had been completely overlooked in the reassessment proceedings. Revenue’s counsel did not dispute that the petitioner’s stand had not been addressed.
Issue Before Court: Whether the reassessment proceedings were valid when the revenue failed to consider the petitioner’s prior explanation regarding the remittance before issuing the Section 148A(3) order and notice under Section 148.
HC Decided: The Delhi High Court set aside the order dated 29.06.2025 passed under Section 148A(3) and the reassessment notice issued under Section 148. The Court observed that the petitioner’s explanation had not been examined by the Assessing Officer.
The matter was remanded to the Assessing Officer to pass a fresh, reasoned order after granting the petitioner a proper hearing. The AO must conduct the entire exercise including hearing and issuance of a fresh order within six weeks. The writ petition and pending applications were disposed of accordingly.
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