GOPAL BANSAL vs. ASSISSTANT COMMISSIONER OF INCOME TAX

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W.P.(C)/15489/2025HC DelhiDLHC01076816202509 October 2025Author: HON'BLE MR. JUSTICE V. KAMESWAR RAO,HON'BLE MR. JUSTICE VINOD KUMAR5 pages
AI SummaryAllowed

What did the High Court hold?

The Delhi High Court allowed the writ petition. The Court relied on its own judgment in Manju Somani v. Income Tax Officer, which held that the proviso to Section 149 of the Act clearly indicates that reassessment proceedings pertaining to a period prior to April 1, 2021, must adhere to the timeframes existing prior to the Finance Act, 2021. The Court noted that Section 149(1)(b), as it stood before the amendments by the Finance Act, 2021, prescribed a period of six years from the end of the relevant assessment year as the terminal point for issuing a notice under Section 148. Since the impugned notice for AY 2015-16 was issued after this period had elapsed, the Court found the action unsustainable. The Court also observed that the present case, relating to AY 2015-16, being an earlier year than AY 2016-17 dealt with in Manju Somani, should naturally follow the same course. Consequently, the impugned order under Section 148A(d) and the consequential notice under Section 148 were set aside.

What were the facts?

The petitioner, Gopal Bansal, filed a writ petition before the Delhi High Court challenging a notice dated 31.08.2024 issued under Section 148 of the Income Tax Act, 1961, and an order dated 31.08.2024 passed under Section 148A(d) of the Act. Both were for Assessment Year (AY) 2015-16. The challenge was based on the ground that these actions were barred by limitation as per the first proviso to Section 149 of the Act. The petitioner relied on the High Court's judgment in Manju Somani v. Income Tax Officer. The Assessing Officer (AO) had noted in the Section 148A(b) proceedings that the department was examining the Manju Somani decision and it was not appropriate to close proceedings at that stage.

What were the issues?

1. Whether the notice dated 31.08.2024 issued under Section 148 of the Income Tax Act, 1961, for AY 2015-16 is illegal and without jurisdiction, being barred by limitation under the first proviso to Section 149 of the Act. 2. Whether the order dated 31.08.2024 passed under Section 148A(d) of the Act for AY 2015-16 is illegal and without jurisdiction, being barred by limitation under the first proviso to Section 149 of the Act. Assessee's Contentions: The petitioner argued that the notice and order were barred by limitation under the first proviso to Section 149 of the Act, relying on the Delhi High Court's judgment in Manju Somani v. Income Tax Officer. The petitioner also stated that, to his information, no Special Leave Petition (SLP) had been filed against the Manju Somani judgment. Revenue's Contentions: The respondent stated that they could not confirm whether an SLP had been filed against the Manju Somani judgment. The respondent did not show anything contrary to the Manju Somani judgment.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A,Section 149

AI-generated summary — verify with the full judgment below

W.P.(C) 15489/2025 $~78 * IN THE HIGH COURT OF DELHI AT NEW DELHI %

Date of Decision : 09.10.2025 + W.P.(C) 15489/2025 GOPAL BANSAL .....Petitioner Through: Mr. Anmol Jagga and Mr. Shagun Ruhil, Advs. versus ASSISSTANT COMMISSIONER OF INCOME TAX .....Respondent Through: Mr. Siddhartha Sinha, SSC. CORAM: HON'BLE MR. JUSTICE V. KAMESWAR RAO HON'BLE MR. JUSTICE VINOD KUMAR V. KAMESWAR RAO, J. (ORAL) CM APPL. 63311/2025(Exemption)

1.

Exemption is allowed, subject to all just exceptions.

2.

The application stands disposed of. W.P.(C) 15489/2025 & CM APPL. 63310/2025. 3. This petition has been filed by the petitioner with the following prayers: “(A)Pass an appropriate order/ direction/ writ of Certiorari to call for the records relating to the impugned notice dated 31.08.2024 issued under section 148 of the Act (Annexure P-1) by the Respondent Ro. 1 for AY 2015-16 and quash the same for being illegal and W.P.(C) 15489/2025 without jurisdiction; (B)Pass an appropriate order/ direction I writ of Certiorari to call for the records relating to the impugned order dated 31.08.2024 issued under section l 48A(d) of the Act (Annexure P-2) by the respondent no.I for AY 2015-16 and quash the same for being illegal and without jurisdiction;”

4.

Mr. Anmol Jagga, learned counsel for the petitioner submits that the petitioner in writ petition is challenging the order passed under Section 148A(d) of Income Tax Act, 1961 (the Act) dated 31.08.2024, and consequential notice issued under Section 148 of the Act of the same date. The petition is relatable to the Assessment Year (AY) 2015-16. The challenge is on the ground that the same are barred by limitation in terms of first proviso Section 149 of the Act.

5.

In support of his submission Mr. Jagga relies upon the judgment of this Court in the case of Manju Somani v. Income Tax Officer Ward 70(1) & Ors reported as 2024 SCC OnLine Del 5292. 6. In fact, we find that such a plea was advanced by the petitioner in reply to notice under Section 148A(b) of the Act and the same has been dealt with by the Assessing Officer (AO) in Paragraph 5.3 which we reproduce as under: “5.3 In this regard, it is submitted that since the decision of Hon’ble High Court in Manju Somani is a very recent one as pronounced on 23.07.2024.The department is in the process of examining the decision for acceptance or filing of SLP against the said order. Therefore, at this stage, it may not be appropriate to close the present 148A proceedings. If the proceedings are closed at this stage, the issue at hand shall be lost irrevocably. Hence, with due regard to the decision of the Hon’ble Court and in the circumstances mentioned above, where no W.P.(C) 15489/2025 direction regarding the stand of the revenue on this issue has been received, the matter is considered on merits.”

7.

On a specific query to Mr. Jagga, whether the judgment in Manju Somani (supra) has been challenged, he states that, as per his information no SLP has been filed against the same.

8.

Mr. Siddhartha Sinha, learned Senior Standing Counsel for the respondent states that he cannot confirm this aspect.

9.

Mr. Sinha has not shown anything contrary to the judgment of this Court in Manju Somani (supra), more particularly Paragraph 12 onwards, which reads as under:

“12. As is manifest from the above, the Proviso to Section 149 clearly bids us to go back in point of time and examine whether a proposed reassessment pertaining to a period prior to 01 April 2021 would sustain based on the time frames as they existed prior to the promulgation of Finance Act, 2021. The Proviso embodies a negative command restraining the respondents from issuing a notice under Section 148 in respect of an AY prior to 01 April 2021, if the period within which such a notice could have been issued in accordance with the provisions as they existed prior thereto had elapsed. This is manifest from the provision using the expression “no notice under Section 148 shall be issued” if the time limit specified in the relevant provisions “…..as they stood immediately prior to the commencement of the Finance Act, 2021” had expired. A reassessment which is sought to be commenced post 01 April 2021 would thus have to abide by the time limits prescribed by Sections 149 (1)(b), 153A or 153B as may be applicable.

13.

Undisputedly, Section 149(1)(b) as it stood prior to the introduction of the amendments by way of Finance Act, 2021 prescribed that no notice under Section 148 W.P.(C) 15489/2025 shall be issued if four years “but not more than six years” have elapsed from the end of the relevant assessment year. Thus the period of six years stood erected as the terminal point which when crossed would have rendered the initiation of reassessment impermissible in law.

14.

Viewed in light of the above, the impugned notice when tested on the anvil of the pre-amendment Section 149(1)(b) in order to be sustained would have to meet the prescription of six years. Undisputedly that period in respect of AY 2016-17 came to an end on 31 March 2023. We thus find ourselves unable to sustain the impugned action of reassessment and which was commenced pursuant to the notice dated 29 April 2024. 15. It would be important to note that the respondents also do not attempt to sustain the initiation of action on any other statutory provision and which could be read as extending the time limit that applied. We also find ourselves unable to read Twylight Infrastructure as empowering them to reopen assessments contrary to the negative covenant which forms part of Section 149 of the Act.

16.

We accordingly allow the present writ petition and quash the impugned order under Section 148A (d) dated 29 April 2024 as well as the consequential notice under Section 148 of even date.”

10.

Suffice to state, in view of the judgment of the Supreme Court in Union of Indian & Ors. v. Rajeev Bansal, Civil Appeal No. 8629/2024 and of this court in Manju Somani (supra), the present petition needs to be allowed, we order so.

11.

Additionally, we note that the issue in Manju Somani (supra) was relatable to the AY 2016-17. If that be so, the present petition being of the earlier AY 2015-16 it should naturally follow the same course. Consequently, the impugned order dated 31.08.2024 passed under Section W.P.(C) 15489/2025 148A(d) of the Act and the notice issued under Section 148 of the Act are set aside.

12.

The petition is disposed of. Pending application is also disposed of as infructuous. V. KAMESWAR RAO, J VINOD KUMAR, J OCTOBER 09, 2025 rt

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