Dlf Home Developers Ltd vs Deputy Commissioner Of Income Tax Circle 74(1) Delhi & Anr.

Court
Delhi High Court

$~23
* IN THE HIGH COURT OF DELHI AT NEW DELHI
th
Date of decision: 15 October, 2026
# CNR No. DLHC010503932026
+ W.P.(C) 15467/2026 & CM APPLs. 72570/2026, 72571/2026
DLF HOME DEVELOPERS LTD. .....Petitioner
Through: Ms. Kavita Jha Sr. Adv., Mr. Vaibhav
Kulkarni, Mr. Akash Shukla,
Advocates.

versus

DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 74(1)
DELHI & ANR. .....Respondent
Through: Mr. Puneet Rai SSC, Mr. Ashvini
Kumar JSC, Ms. Nancy Jain, Mr.
Aryan Mittal, Advocates.

CORAM:
HON'BLE MR. JUSTICE DINESH MEHTA
HON'BLE DR. JUSTICE ADITI CHOUDHARY
J U D G M E N T
DINESH MEHTA, J. (ORAL)

1. By way of present writ petition, the petitioner has challenged order
dated 31.08.2026, passed by the respondent No. 1 rejecting petitioner’s
rectification application under Section 154 read with Section 201(1) and
201(1A) of the Income Tax Act, 1961 (hereinafter referred to as the ‘ Act of
1961 ’) for the financial year 2015-16.
2. The facts of the case rather lie in a very narrow compass. By way of
an order dated 22.03.2023, the Assessing Officer, had held the
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Signed By:PRATIMA
Signing Date:28.10.2026
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petitioner/assessee to be in default under Section 201(1)/201(1A) of the Act
of 1961, alleging that it had failed to deduct the tax at source as required
under Section 194I of the Act of 1961 on the payment of External
Development charges paid to Haryana Urban Development Authority
(HUDA).
3. It may be noted that similar orders were passed by the Assessing
Officer against the petitioner for previous financial years (2013-14 and
2014-15) as well, qua which the petitioner had filed writ petitions before this
Court.
4. Immediately two days after passing of the above referred order dated
22.03.2023, this Court vide judgment dated 24.03.2023 rendered in the case
of DLF Homes Panchkula (P.) Ltd. v. Joint Commissioner of Income Tax
(OSD) , reported as (2023) 149 Taxmann.com 176 (Delhi) allowed a bunch
of writ petitions which included the writ petitions filed by the petitioner and
held that the petitioner and similar other situated petitioners cannot be held
assessees in default under Section 194I of the Act of 1961 while setting
aside the orders passed by the Assessing Officer.
5. Since the issue was covered in petitioner’s favour, the petitioner
submitted various letters requesting the Assessing Officer to drop the
demand, but the same was not done and the Assessing Officer insisted upon
recovery of the demand, for which the petitioner filed a formal rectification
application under Section 154 of the Act of 1961 on 23.02.2026, which was
rejected by the Assessing Officer on 31.08.2026 by impugned order.
6. It has been argued by Ms. Jha, learned senior counsel on behalf of
petitioner/assessee that though the issue stood squarely covered in
petitioner’s favour by the above mentioned judgment of Delhi High Court
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Signed By:PRATIMA
Signing Date:28.10.2026
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which has been affirmed by Hon’ble the Supreme Court vide order dated
23.02.2024 in assessee’s own case in Joint Commissioner of Income Tax
(OSD) v. DLF Homes Panchkula (P.) Ltd. , reported as [2024] 161
taxmann.com 237 (SC) yet the Assessing Officer rejected petitioner’s
rectification application, inter-alia, holding that the decision of the Delhi
High Court was subsequent to the date of order and hence, it did not fall
within the ambit and scope of Section 154 of the Act of 1961.
7. Ms. Jha, learned senior counsel further submitted that the impugned
order passed by the Assessing Officer is clearly illegal and contrary to law
inasmuch as Hon’ble the Supreme Court in the case of ACIT vs. Saurashtra
Kutch Stock Exchange Ltd. , reported as [2008] 305 ITR 227 (SC) has
squarely held that non-consideration of a decision of Jurisdictional High
Court or of Supreme Court is a ‘mistake apparent from record’ and such
order can be rectified.
8. She further submitted that Hon’ble the Supreme Court in para 41 of
Saurashtra Kutch (supra) has observed that even a subsequent judgment
can be a reason to rectify an order, as the same amounts to an apparent error
on the face of it.
9. At this juncture, Mr. Puneet Rai, learned Senior Standing Counsel
interjected and pointed out that para 41 is not a finding or decision of
Hon’ble the Supreme Court but a passing reference of the judgment of the
Gujarat High Court rendered in the case of Suhrid Geigy Ltd. v.
Commissioner of Surtax , (1999) 107 Taxman 347 Gujarat.
10. Ms. Jha, learned senior counsel further submitted that notwithstanding
the aforesaid judgment, the CBDT circular no. 68 [F.No. 245/17/71-
A&PAC] dated 17.11.1971 clearly postulates that even a subsequent
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Signed By:PRATIMA
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judgment of the Hon’ble Supreme Court would constitute ‘a mistake
apparent from the record’. She argued that since the judgment of Delhi High
Court has been affirmed by the Hon’ble the Supreme Court and both the
judgments were placed before the Assessing Officer, it was incumbent upon
him to rectify his order and to set aside the demand raised, rather than
rejecting the rectification application filed by the petitioner on technical
ground.
11. Mr. Rai, learned Senior Standing Counsel, on the other hand, argued
that the Assessing Officer has committed no error of law in rejecting the
rectification application, as the case did not fall within the parameters of
Section 154 of the Act of 1961.
12. He further argued that the petitioner can file an appeal against order
dated 31.08.2026 and submitted that this Court should not entertain a writ
petition directly against an order passed by the Assessing Officer. He was,
however, not in a position to dispute the factual and legal position, so far as
the merit of the issue is concerned – that the petitioner cannot be held to be
an assessee in default for not deducting tax under Section 194I of the Act of
1961 as has been held by this Court in DLF Homes Panchkula ( supra ) .
13. Heard learned counsel for the parties and perused the record.
14. So far as the issue as to whether the subsequent judgment which was
passed by Delhi High Court in DLF Homes Panchkula ( supra ) constitutes
an apparent error on the face of record so as to warrant rectification of the
order dated 22.03.2023 is concerned, we leave this issue open, as the
judgment of Hon’ble the Supreme Court which has been cited before us
more particularly para No. 41, in our opinion is not an opinion or
observation of Hon’ble the Supreme Court but observation of what has been
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Signed By:PRATIMA
Signing Date:28.10.2026
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held by the Gujarat High Court in Suhrid Geigy Ltd. (supra). And, there is
no specific approval of such view. In appropriate case, such issue needs to
be decided; we, therefore, leave this question open.
15. Be that as it may. Since the issue has been set at rest by this Court, the
impugned order dated 22.03.2023 so also the order dated 31.08.2026 passed
by the Assessing Officer being contrary to the law laid down by this Court
in the judgment dated 24.03.2023 in DLF Homes Panchkula (supra) are
held illegal. Since the issue is covered by the judgment of this Court, we do
not deem it appropriate to ask the petitioner to undertake the formality of
going before the Appellate Authority, which in our view, will be a redundant
formality and inefficacious remedy.
16. For the reason stated above, the writ petition is allowed and impugned
order dated 22.03.2023 so also the order dated 31.08.2026 are hereby
quashed and set aside.
17. The pending applications stand disposed of.

DINESH MEHTA
(JUDGE)


ADITI CHOUDHARY
(JUDGE)
OCTOBER 15, 2026/ naw
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Signed By:PRATIMA
Signing Date:28.10.2026
11:40:02