HAIER SMART HOME CO LTD vs. THE ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRLE 2 NEW DELHI & ANR.

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W.P.(C)/3514/2025HC DelhiDLHC01014809202521 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 allowed the petition and set aside the impugned notice and proceedings. The Court held that the reassessment proceedings were indeed barred by limitation. The Court referred to its previous decisions in Dinesh Jindal v. Assistant Commissioner of Income Tax, Central Circle 20, Delhi & Others, KAD Housing Private Limited v. Deputy Commissioner of Income Tax Central Circle-6, Delhi, and Pankaj Jain v. Assistant Commissioner of Income Tax, Central Circle 3, Delhi & Anr. The Court also cited The Pr. Commissioner of Income Tax -Central-1 v. Ojjus Medicare Pvt. Ltd, explaining that the block period of ten years is computed from the end of the assessment year relevant to the financial year in which the AO of the searched person recorded satisfaction and handed over material. In this case, the notice was issued on 30.03.2024, making AY 2024-25 the first year in the block period, and thus AY 2014-15 was time-barred. The impugned notice and consequential proceedings were set aside.

What were the facts?

The petitioner, Haier Smart Home Co Ltd, challenged a notice dated 30.03.2024 issued under Section 148 of the Income Tax Act, 1961, for Assessment Year (AY) 2014-15. The petitioner argued that the reassessment proceedings were barred by limitation. The impugned notice was based on a search conducted on 27.03.2023 in the case of Haier Appliances India Private Limited. The petitioner contended that since the search occurred after 31.03.2021, the provisions for the Assessing Officer (AO) to record satisfaction regarding the assessee's connection to the seized material were no longer applicable in the same manner. The limitation period under Section 153C of the Act was argued to be reckoned from the date the AO decided to take action, which would be the date of issuing the Section 148 notice.

What were the issues?

1. Whether the notice dated 30.03.2024 issued under Section 148 of the Income Tax Act, 1961, for AY 2014-15 is barred by limitation, considering the search conducted on 27.03.2023 in a related entity and the amendments to the Act post-31.03.2021. Assessee's Contention: The initiation of reassessment proceedings was barred by limitation. The proviso to Section 149(1) of the Act prohibits the issuance of a notice under Section 148A if the time limit for issuing a notice under Section 153A, 153C, or 148 for the relevant AY has expired. The petitioner argued that the limitation period should be reckoned from the date of issuing the Section 148 notice, given the search occurred after 31.03.2021. Revenue's Contention: The Revenue's counsel fairly stated that there was no cavil with the computation of the application of the block period of ten years as presented by the assessee.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A,Section 149(1),Section 153A,Section 153C

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
$~59 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 3514/2025 & CM APPL. 16460-61/2025 HAIER SMART HOME CO LTD .....Petitioner Through: Mr Deepak Chopra, Mr Rohan and Mr Priyam Bhatnagar, Advocates. versus THE ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRLE 2 NEW DELHI & ANR. .....Respondents Through: Mr Sunil Aggarwal, SSC, Mr Shivansh B Pandya, Mr Viplav Acharya, Ms Priya Sarkar, JSCs and Mr Utkarsh Tiwari, Advocate. CORAM: HON'BLE MR. JUSTICE VIBHU BAKHRU HON'BLE MR. JUSTICE TEJAS KARIA

O R D E R % 21.03.2025

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 30.03.2024 [impugned notice] issued under Section 148 of the Income Tax Act, 1961 [the Act] in respect of the Assessment Year [AY] 2014-15. 3. It is the petitioner’s case that the initiation of the reassessment proceedings pursuant to the impugned notice was barred by limitation. Proviso to Section 149(1) of the Act proscribe the issuance of notice under Section 148A of the Act if the time period for issuance of notice under Section 153A, 153C or 148 of the Act for the relevant assessment year expired.

4.

In the present case, the impugned notice is premised on a search conducted on 27.03.2023 under Section 132 of the Act in the case of Haier Appliances India Private Limited. The said search was conducted after 31.03.2021, and the provisions for an Assessing Officer [AO] to record his 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 21:35:27

satisfaction that the material, documents, or assets either belong to or contained information relating to the assessee are no longer applicable. In the given circumstances, the period of limitation as contemplated under Section 153C of the Act is required to be reckoned with the reference to the date on which the AO has decided to take action or reassessment. This would be the date on which the AO issues the notice under Section 148 of the Act.

5.

This issue is covered by various decision of this court including in Dinesh Jindal v. Assistant Commissioner of Income Tax, Central Circle 20, Delhi & Others: Neutral Citation: 2024: DHC:4554-DB, KAD Housing Private Limited v. Deputy Commissioner of Income Tax Central Circle-6, Delhi : Neutral Citation : 2024:DHC:8214-DB as well as Pankaj Jain v. Assistant Commissioner of Income Tax, Central Circle 3, Delhi & Anr. : Neutral Citation : 2025:DHC:157-DB.

6.

In The Pr. Commissioner of Income Tax -Central-1 v. Ojjus Medicare Pvt. Ltd : Neutral Citation : 2024:DHC:2629-DB this court had explained that the block period of ten years is required to be computed from the end of the assessment year relevant to the financial year in which the AO of the searched person has recorded its satisfaction and handed over the material or books of accounts to the AO of the assessee not being the searched person. Thus, the block period of ten years is required to be computed from the end of the AY 2024-25, which is relevant to the financial year in which the impugned notice was issued.

7.

Mr Chopra, the learned counsel appearing for the petitioner has handed over a tabular statement setting out the block period of ten years applicable to the assessment year that could be covered in such case. The said tabular 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 21:35:27

statement is set out below:-

8.

Mr Aggrawal, the learned counsel appearing for the Revenue fairly states that there is no cavil with the computation of application of block period of ten years, as set out above.

9.

In view of the above, the impugned notice and proceedings thereto are set aside.

10.

The petition is allowed in above terms. Pending applications are also disposed of. VIBHU BAKHRU, J TEJAS KARIA, J MARCH 21, 2025 M Click here to check corrigendum, if any Notice under Section 148 issued on 30.03.2024, therefore, first Assessment Year would be 2024-25 No. of year AY 1 2024-25 2 2023-24 3 2022-23 4 2021-22 5 2020-21 6 2019-20 7 2018-19 8 2017-18 9 2016-17 10 2015-16 Relevant AY under consideration -11 (Time Barred) 2014-15 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 21:35:27

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