TIA ENTERPRISES PVT LTD vs. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 25(1), DELHI

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W.P.(C)/7532/2024HC DelhiDLHC01031375202414 May 2025Author: HON'BLE MR. JUSTICE VIBHU BAKHRU,HON'BLE MR. JUSTICE TEJAS KARIA3 pages
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What did the High Court hold?

The Delhi High Court held that the impugned notice dated 02.05.2024, issued under Section 148 of the Income Tax Act, 1961, for AY 2016-17, is barred by limitation. The Court reasoned that the period of six years from the end of AY 2016-17 expired on 31.03.2023. Since the notice was issued after this date, it falls outside the permissible time limit. This conclusion was supported by the Supreme Court's decision in Union of India & Others v. Rajeev Bansal, which clarified that a notice under the new regime cannot be issued if the time limit under the old regime (specifically, the six-year period under Section 149(1)(b)) has expired. The Court noted that the respondent's counsel concurred with this view. Consequently, the impugned notice was set aside, and the petition was allowed. No issues were expressly left undecided.

What were the facts?

The petitioner, Tia Enterprises Pvt Ltd, filed a writ petition before the Delhi High Court challenging a notice dated 02.05.2024 issued under Section 148 of the Income Tax Act, 1961, for Assessment Year (AY) 2016-17. The petition also challenged the preceding notice under Section 148A(b) and the order passed under Section 148A(d). The petitioner contended that the issue was covered by the High Court's decision in Manju Somani v. Income Tax Officer and the Supreme Court's ruling in Union of India & Others v. Rajeev Bansal. The respondent, Assistant Commissioner of Income Tax, concurred with the petitioner's submission.

What were the issues?

1. Whether the notice dated 02.05.2024 issued under Section 148 of the Income Tax Act, 1961, for AY 2016-17 is barred by limitation, considering the period of six years from the end of the relevant assessment year expired on 31.03.2023. Assessee's Contention: The petitioner argued that the impugned notice is barred by limitation. They relied on the decision of the Delhi High Court in Manju Somani v. Income Tax Officer Ward-70(1) & Ors and the Supreme Court's judgment in Union of India & Others v. Rajeev Bansal. Specifically, they highlighted passages from the Supreme Court's decision stating that a notice under Section 148 of the new regime cannot be issued if the period of six years from the end of the relevant assessment year has expired at the time of issuance of the notice, as per the first proviso to Section 149(1)(b) of the old regime. Revenue's Contention: The learned counsel for the respondent concurred with the petitioner's view.

Which sections of the Income-tax Act were involved?

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

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Cause title — parties, addresses and appearances
$~32 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 7532/2024 & CM APPL. 31352/2024 TIA ENTERPRISES PVT LTD .....Petitioner Through: Dr Kapil Goel and Mr Sandeep Goel, Advocates. versus ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 25(1), DELHI .....Respondent Through: Mr Sunil Agarwal, SSC Mr Shivansh B. Pandya, Mr Viplav Acharya, Ms Priya Sarkar, JSCs and Mr Utkarsh Tiwari, Advocates. CORAM: HON'BLE MR. JUSTICE VIBHU BAKHRU HON'BLE MR. JUSTICE TEJAS KARIA

O R D E R % 14.05.2025

1.

The petitioner has filed the present petition, inter alia, impugning a notice dated 02.05.2024 [the impugned notice] issued under Section 148 of the Income Tax Act, 1961 [the Act] for the assessment year (AY) 2016-17. 2. The petitioner also impugns the notice issued under Section 148A(b) of the Act, and the order passed under Section 148A(d) of the Act prior to the issuance of the impugned notice.

3.

The learned counsel appearing for the petitioner submits that the issue stands covered by the decision of this Court in Manju Somani v. Income Tax Officer Ward-70(1) & Ors: Neutral Citation: 2024:DHC:5411-DB.

4.

The learned counsel for the petitioner also referred to the decision of the Supreme Court in Union of India & Others v. Rajeev Bansal: 2024 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 22:32:32

SCC OnLine SC 2693 and drew the attention of this Court to the following passages from the said judgment:

“46. The ingredients of the proviso could be broken down for analysis as follows: (i) no notice under Section 148 of the new regime can be issued at any time for an assessment year beginning on or before 1 April 2021; (ii) if it is barred at the time when the notice is sought to be issued because of the “time limits specified under the provisions of” 149(1)(b) of the old regime. Thus, a notice could be issued under Section 148 of the new regime for assessment year 2021-2022 and before only if the time limit for issuance of such notice continued to exist under Section 149(1)(b) of the old regime. *** *** ***

49.

The first proviso to Section 149(1)(b) requires the determination of whether the time limit prescribed under Section 149(1)(b) of the old regime continues to exist for the assessment year 2021-2022 and before. Resultantly, a notice under Section 148 of the new regime cannot be issued if the period of six years from the end of the relevant assessment year has expired at the time of issuance of the notice. This also ensures that the new time limit of ten years prescribed under Section 149(1)(b) of the new regime applies prospectively. For example, for the assessment year 2012-2013, the ten year period would have expired on 31 March 2023, while the six year period expired on 31 March 2019. Without the proviso to Section 149(1)(b) of the new regime, the Revenue could have had the power to reopen assessments for the year 2012-2013 if the escaped assessment amounted to Rupees fifty lakhs or more. The proviso limits the retrospective operation of Section 149(1)(b) to protect the interests of the assesses.” 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 22:32:32

5.

In the present case, the period of six years from the end of the relevant AY 2016-17 expired on 31.03.2023. The impugned notice has been issued thereafter, and the same is thus barred by limitation.

6.

The learned counsel for the respondent concurs with the aforesaid view.

7.

In view of the above, the impugned notice is set aside.

8.

The petition is allowed in the aforesaid terms. The pending application is also disposed of. VIBHU BAKHRU, J TEJAS KARIA, J MAY 14, 2025 M 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 22:32:32

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