WAVE MEGA CITY CENTRE PRIVATE LIMITED vs. ASSITANT COMMISSIONER OF INCOME TAX & ANR.

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W.P.(C)/13452/2024HC DelhiDLHC01064592202429 April 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 impugned notice dated August 31, 2024, issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2014-15 is barred by limitation. The Court relied on its decision 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. The reasoning was that the period of six years from the end of the relevant assessment year (2014-15) expired on March 31, 2021. As the notice was issued after this date, it was found to be beyond the permissible time limit. The Court set aside the impugned notice and allowed the petition. The ratio decidendi is that notices under Section 148 for assessment years prior to April 1, 2021, must adhere to the time limits prescribed under the old regime, and if the six-year period from the end of the relevant assessment year has expired, such notices cannot be issued.

What were the facts?

The petitioner, Wave Mega City Centre Private Limited, filed a writ petition before the Delhi High Court challenging a notice dated August 31, 2024, issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2014-15. The petition also challenged the prior notice under Section 148A(b) and the order passed under Section 148A(d). The petitioner argued that the issuance of the Section 148 notice was barred by limitation. The Revenue's counsel accepted notice and concurred with the petitioner's submission regarding the limitation period.

What were the issues?

1. Whether the notice dated August 31, 2024, issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2014-15 is barred by limitation, considering the provisions of Section 149(1)(b) of the old regime and the proviso to Section 149(1)(b) of the new regime. Assessee's Contention: The petitioner argued that the issue is covered by the Delhi High Court's 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, the petitioner contended that the six-year period from the end of Assessment Year 2014-15 expired on March 31, 2021, making the subsequent issuance of the notice under Section 148 barred by limitation. Revenue's Contention: The learned counsel for the respondents concurred with the petitioner's view on the limitation period.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
$~46 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 13452/2024 and CM APPL. 56227/2024 WAVE MEGA CITY CENTRE PRIVATE LIMITED .....Petitioner Through: Ms Ananya Kapoor and Mr Utkarsh Gupta, Advocates. versus ASSITANT COMMISSIONER OF INCOME TAX & ANR. .....Respondents Through: Mr Siddhartha Sinha, senior standing counsel with Ms Anu Priya Nisha Minz, Advocate. CORAM: HON'BLE MR. JUSTICE VIBHU BAKHRU HON'BLE MR. JUSTICE TEJAS KARIA

O R D E R % 29.04.2025

1.

Issue notice. The learned counsel for the Revenue accepts notice.

2.

The petitioner has filed the present petition, inter alia, impugning a notice dated 31.08.2024 [the impugned notice] issued under Section 148 of the Income Tax Act, 1961 [the Act] for the Assessment Year [AY] 2014-15. 3. 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.

4.

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.

5.

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 02/07/2025 at 00:22:13

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 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 00:22:13

assessees.”

6.

In the present case, the period of six years from the end of the relevant assessment year 2014-15 expired on 31.03.2021. The impugned notice has been issued thereafter, and the same is thus barred by limitation.

7.

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

8.

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

9.

The petition is allowed in the aforesaid terms. Pending applications also stand disposed of. VIBHU BAKHRU, J TEJAS KARIA, J APRIL 29, 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 02/07/2025 at 00:22:13

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