MRJ CONSULTANTS PRIVATE LIMITED vs. INCOME TAX OFFICER CIRCLE 28(1) DELHI & ANR.

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W.P.(C)/13237/2024HC DelhiDLHC01062944202407 May 2025Author: HON'BLE MR. JUSTICE VIBHU BAKHRU,HON'BLE MR. JUSTICE TEJAS KARIA3 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that the impugned notice dated 31.08.2024, issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2017-18, is barred by limitation. The Court reasoned that the period of six years from the end of the relevant assessment year (AY 2017-18) expired on 31.03.2024. As the impugned notice was issued after this date, it contravenes the principles laid down by the Supreme Court in Union of India & Others v. Rajeev Bansal, which clarifies that notices under the new regime cannot be issued if the time limit under the old regime (specifically, the six-year period) has expired. The Court found that the proviso to Section 149(1)(b) of the new regime limits its retrospective operation to protect assessees. Consequently, the impugned notice was set aside. The petition was allowed in these terms.

What were the facts?

The petitioner, MRJ Consultants Private Limited, challenged a notice dated 31.08.2024 issued under Section 148 of the Income Tax Act, 1961, for Assessment Year (AY) 2017-18. The challenge also extended to the notice under Section 148A(b) and the order passed under Section 148A(d) that preceded the Section 148 notice. The petitioner argued that the issue was covered by existing High Court and Supreme Court decisions. The respondents, Income Tax Officer Circle 28(1) Delhi and another, concurred with the petitioner's view.

What were the issues?

1. Whether the notice issued under Section 148 of the Income Tax Act, 1961, for AY 2017-18 is barred by limitation, considering the period of six years from the end of the relevant assessment year expired on 31.03.2024, and the notice was issued thereafter. Assessee's contention: The petitioner argued that the issue is covered by the decision in Manju Somani v. Income Tax Officer Ward-70(1) & Ors and the Supreme Court's decision in Union of India & Others v. Rajeev Bansal. Specifically, they relied on passages from Rajeev Bansal 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 this protects assessees from the retrospective operation of Section 149(1)(b) of the new regime. Revenue's contention: The learned counsel for the respondents concurred with the petitioner's view.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
$~51 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 13237/2024 CM APPL. 55288/2024 MRJ CONSULTANTS PRIVATE LIMITED .....Petitioner Through: Mr. Vaibhav Kulkarni & Mr. Akash Shukla, Advs. Versus INCOME TAX OFFICER CIRCLE 28(1) DELHI & ANR. .....Respondents Through: Mr. Abhishek Maratha, Mr. Apoorv Agarwal, Mr. Parth Samwal, Ms. Nupur Sharma, Mr. Gaurav Singh, Mr. Bhanukaran Singh Jodha, Ms. Muskaan Goel & Mr. Himanshu Gaur, Advocates CORAM: HON'BLE MR. JUSTICE VIBHU BAKHRU HON'BLE MR. JUSTICE TEJAS KARIA

O R D E R % 07.05.2025

1.

The petitioner has filed the present petition, inter alia, impugning a notice dated 31.08.2024 [impugned notice] issued under Section 148 of the Income Tax Act, 1961 [Act] for the Assessment Year [AY] 2017-18. 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 No.: 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 assessees.” 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 assessment year 2017-18 expired on 31.03.2024. The impugned notice has been issued thereafter, and the same is thus barred by limitation.

6.

The learned counsel for the respondents 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. Pending application also stands disposed of. VIBHU BAKHRU, J TEJAS KARIA, J MAY 07, 2025 ‘gsr’ 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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