Delhi High Court Upholds Section 148 Notice Based on Builder’s Seized Excel Sheet

The petitioner, Veena Arora, challenged a reassessment notice issued under Section 148 of the Income Tax Act, 1961, dated 28.03.2025. The notice was based on material recovered during search proceedings at the premises of Bhutani Infra Group and Associates, including an Excel sheet reflecting a cash transaction of Rs. 7,97,991 in which the petitioner’s name appeared.

The petitioner contended that, except for the Excel sheet, there was no other incriminating material linking her to the alleged transaction and that reassessment could not be initiated merely on that basis. During the hearing, the petitioner admitted to having purchased a flat from the said builder but denied any nexus with the alleged cash transaction.

Main Issue: Whether a reassessment notice under Section 148 can be sustained when based on seized third-party material indicating a cash transaction linked to the assessee.

HC Decided: The Delhi High Court dismissed the writ petition, holding that the material relied upon by the Assessing Officer was sufficient to infer escapement of income. The Court observed that post-01.04.2021, Section 148 does not require recording of “reason to believe,” nor the possession of conclusive evidence at the notice stage.

The Court clarified that it is open to the petitioner to demonstrate before the Assessing Officer that the basis is erroneous or that she has no nexus with the amount reflected in the seized material. The notice was held to be valid and not without jurisdiction.

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