DELHI AUTO AND GENERAL FINANCE PRIVATE LIMITED vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 7-1, DELHI & ANR.

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W.P.(C)/3654/2023HC DelhiDLHC01010154202328 March 2025Author: HON'BLE MR. JUSTICE VIBHU BAKHRU,HON'BLE MR. JUSTICE TEJAS KARIA3 pages
AI SummaryAllowed

What did the High Court hold?

The Delhi High Court held that the notice dated July 29, 2022, issued under Section 148 of the Income Tax Act, 1961, for AY 2013-14, was indeed issued beyond the period of limitation. The Court noted that the initial notice under Section 148, construed as a notice under Section 148A(b) per the Supreme Court's directions, was issued on the last date of the limitation period extended by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. The Fourth Proviso to Section 149(1) allowed a further seven days for issuing a notice under Section 148, which expired on June 23, 2022. Since the impugned notice was not issued within this extended period, it was found to be beyond limitation. The Court relied on its earlier decision in Ram Balram Buildhome Pvt. Ltd. v. Income Tax Officer and Anr. The Revenue did not contest this finding. Consequently, the petition was allowed, and the impugned notice and all consequential proceedings were set aside.

What were the facts?

The petitioner, Delhi Auto and General Finance Private Limited, challenged a notice dated July 29, 2022, issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2013-14. Initially, a notice under Section 148 was issued on June 30, 2021, under the pre-April 1, 2021, reassessment regime. This notice was subject to challenges, and following the Supreme Court's decision in Union of India & Ors. v. Ashish Agarwal, it was to be construed as a notice under Section 148A(b). The Assessing Officer (AO) issued a notice under Section 148A(b) on June 1, 2022, to which the petitioner responded. Subsequently, another notice under Section 148A(b) was issued on June 27, 2022. The petitioner contended that the impugned notice dated July 29, 2022, was issued beyond the period of limitation.

What were the issues?

1. Whether the notice dated July 29, 2022, issued under Section 148 of the Income Tax Act, 1961, for AY 2013-14, is barred by limitation, considering the directions of the Supreme Court in Union of India & Ors. v. Ashish Agarwal and the provisions of the Fourth Proviso to Section 149(1) of the Act. The Assessee argued that the notice was issued beyond the permissible period of limitation. The Revenue did not dispute this issue, acknowledging that it was covered by a previous decision of the Court.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A(b),Section 149(1)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
$~56 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 3654/2023 DELHI AUTO AND GENERAL FINANCE PRIVATE LIMITED .....Petitioner Through: Mr Sumit Lalchandani, Mr Salil Kapoor, Mr Tarun Chanana, Mr Shivam Yadav and Ms Ananya Kapoor, Advocates. Versus ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 7-1, DELHI & ANR. .....Respondents Through: Mr Vipul Agrawal, senior standing counsel with Ms Sakashi Shairwal and Mr Akshat Singh, Advocates. CORAM: HON'BLE MR. JUSTICE VIBHU BAKHRU HON'BLE MR. JUSTICE TEJAS KARIA

O R D E R % 28.03.2025

1.

The petitioner has filed the present petition, inter alia, impugning a notice dated 29.07.2022 issued under Section 148 of the Income Tax Act, 1961 [the Act] in respect of Assessment Year [AY] 2013-14. It is the petitioner’s case that the said notice has been issued beyond the period of limitation.

2.

The Assessing Officer [AO] had issued a notice under Section 148 of the Act in respect of AY 2013-14 on 30.06.2021. Although, the said notice was issued after 31.03.2021, it was issued in accordance with the statutory regime of reassessment (Section 147 to 151 of the Act) as was in force prior to 01.04.2021. 3. The petitions challenging the said notices were allowed by this court, This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 19:04:59

in Mon Mohan Kohli v. Assistant Commissioner of Income Tax and Ors.: Neutral Citation No.: 2021:DHC:4181-DB. Several other High Courts had also quashed similar notices. The orders passed by this court and other Courts setting aside such notices were appealed by the Revenue before the Supreme Court. In Union of India & Ors. v. Ashish Agarwal: (2023) 1 SCC 617, the Supreme Court passed directions under Article 142 of the Constitution of India, directing that such notices issued under Section 148 of the Act be construed as the notices under Section 148A(b) of the Act. The AO was also directed to provide the information required to accompany notices under Section 148A(b) of the Act.

4.

In the present case, the AO provided such information by issuing a notice under Section 148A(b) of the Act on 01.06.2022. The petitioner was granted time till 16.06.2022 to respond to the said notice. The petitioner furnished his response on 11.06.2022. 5. Since the notice under Section 148 of the Act – which was directed to be construed as a notice under Section 148A(b) of the Act in terms of the decision of the Supreme Court in Union of India & Ors. v. Ashish Agarwal (supra)] – was issued on the last date of expiry of limitation as extended by virtue of Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, the AO had no time available for issuance of a notice under Section 148 of the Act. Therefore, the Fourth Proviso to Section 149(1) of the Act is applicable and the AO had a further period of seven days for issuance a notice under Section 148 of the Act. However, the notice was not issued within the said period of seven days; that is on or before 23.06.2022. In view of the above, the present notice has been issued beyond the period of limitation. This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 19:04:59

6.

It is material to note that the AO had also issued another notice dated 27.06.2022 under Section 148A(b) of the Act and the petitioner was provided fifteen days’ time to respond to the same. The said period expired on 12.07.2022. Even if the period of limitation is reckoned from the end of the period of fifteen days provided to the petitioner for responding to the notice dated 27.06.2022, the said period would expire on 19.07.2022. 7. The aforesaid issue is covered by the decision of this Court in Ram Balram Buildhome Pvt. Ltd. v. Income Tax Officer and Anr.: Neutral Citation No.: 2025:DHC:547-DB. The learned counsel appearing for the Revenue does not dispute the same.

8.

In view of the above, the present petition is allowed and the impugned notice and all proceedings emanating therefrom are set aside. VIBHU BAKHRU, J TEJAS KARIA, J MARCH 28, 2025 RK Click here to check corrigendum, if any This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 19:04:59

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