RP BASIA AND CO vs. INCOME TAX OFFICER WARD 63 (1) N EW DELHI

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W.P.(C)/11598/2024HC DelhiDLHC01052891202401 May 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 April 23, 2024, issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2016-17, was barred by limitation. The Court relied on the Supreme Court's decision in Union of India & Others v. Rajeev Bansal, which clarified 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. In this case, the six-year period from the end of Assessment Year 2016-17 expired on March 31, 2023. Since the impugned notice was issued thereafter, it was found to be beyond the permissible time limit. The Court also noted that the Revenue's counsel concurred with this view. Consequently, the impugned notice was set aside, and the petition was allowed.

What were the facts?

The petitioner, RP Basia and Co, filed a writ petition before the Delhi High Court challenging a notice dated April 23, 2024, issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2016-17. The petitioner also challenged 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 previous High Court and Supreme Court decisions. The Revenue's counsel accepted notice and concurred with the petitioner's view.

What were the issues?

1. Whether the notice dated April 23, 2024, issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2016-17 is barred by limitation, considering the period of six years from the end of the relevant assessment year expired on March 31, 2023? (Question of law) Assessee's Contentions: - The issue is covered by the decision in Manju Somani v. Income Tax Officer Ward-70(1) & Ors. - The Supreme Court in Union of India & Others v. Rajeev Bansal has held 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. - The impugned notice was issued after the expiry of the six-year period on March 31, 2023, making it barred by limitation. Revenue's Contentions: - The learned counsel for the respondents concurred with the assessee's view regarding the limitation period.

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
$~86 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 11598/2024 & CM No.48194/2024 RP BASIA AND CO .....Petitioner Through: Dr. Kapil Goel & Mr. Sandeep Goel, Advs. Versus INCOME TAX OFFICER WARD 63 (1) NEW DELHI .....Respondent Through: Mr. Sanjay Kumar, Ms. Monica Benjamin & Ms. Easha Kadian, Advs. CORAM: HON'BLE MR. JUSTICE VIBHU BAKHRU HON'BLE MR. JUSTICE TEJAS KARIA

O R D E R % 01.05.2025

1.

Issue notice.

2.

The learned counsel appearing for the Revenue accepts notice.

3.

The petitioner has filed the present petition, inter alia, impugning a notice dated 23.04.2024 [impugned notice] issued under Section 148 of the Income Tax Act, 1961 [Act] for the Assessment Year [AY] 2016-17. 4. 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.

5.

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.

6.

The learned counsel for the petitioner also referred to the decision of the Supreme Court in Union of India & Others v. Rajeev Bansal: 2024 SCC OnLine SC 2693 and drew the attention of this Court to the following passages from the said judgment: 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 02/07/2025 at 00:23:08

“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.”

7.

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

8.

The learned counsel for the respondents concurs with the aforesaid 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 02/07/2025 at 00:23:08

view.

9.

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

10.

The petition is allowed in the aforesaid terms. Pending application also stands disposed of. VIBHU BAKHRU, J TEJAS KARIA, J MAY 01, 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 02/07/2025 at 00:23:08

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