TOWNPARK BUILDCON PVT LTD vs. ACIT, CC 15 AND ORS

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W.P.(C)/3184/2025HC DelhiDLHC01013148202518 March 2025Author: HON'BLE MR. JUSTICE VIBHU BAKHRU,HON'BLE MR. JUSTICE TEJAS KARIA4 pages
AI SummaryAllowed

What did the High Court hold?

The Delhi High Court held that the impugned notice issued under Section 148 of the Income Tax Act, 1961, for AY 2013-14 was beyond the period of limitation. The court relied on its earlier decisions in Dinesh Jindal v. Assistant Commissioner of Income Tax and The Pr. Commissioner of Income Tax -Central-1 v. Ojjus Medicare Pvt. Ltd. The court noted that the assessment could be reopened for a period of ten years as stipulated in the proviso to Section 153A of the Act. However, in terms of the proviso to Section 149(1) of the Act, assessments for prior years could not be reopened if they could not have been opened at the material time due to being beyond the time limit. The court observed that no satisfaction note had been recorded, and therefore, the ten-year period should be reckoned from the end of the AY relevant to the year in which the impugned notice was issued. Based on the tabular statement provided by the petitioner, AY 2013-14 fell outside this ten-year block. Consequently, the petition was allowed, and the impugned notice and all proceedings pursuant thereto were set aside.

What were the facts?

The petitioner, Townpark Buildcon Pvt Ltd, filed a writ petition challenging a notice dated 06.10.2023 issued under Section 148 of the Income Tax Act, 1961, for Assessment Year (AY) 2013-14. The notice was issued based on information found during a search conducted on 02.03.2022 in the case of Gaur group and related entities. The petitioner is not the searched entity. The assessment for AY 2013-14 was sought to be reopened under Section 153C of the Act. The court noted that no satisfaction note had been recorded. The petitioner argued that the notice was time-barred.

What were the issues?

1. Whether the assessment for AY 2013-14 could be reopened under Section 153C of the Income Tax Act, 1961, in light of the search conducted in a related group's case, and if so, what is the applicable period of limitation? (Mixed question of law and fact, turning on Section 153C and Section 149(1) of the Act). Assessee's Contention: The impugned notice dated 06.10.2023 for AY 2013-14 is beyond the period of limitation prescribed for reopening assessments under Section 153C read with Section 149(1) of the Act. Revenue's Contention: The revenue argued that the assessment could be reopened for a period of ten years prior to the end of the AY in which incriminating material was found, as per the proviso to Section 153A of the Act, and that the proviso to Section 149(1) of the Act also permitted reopening within the stipulated time limits.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
$~92 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 3184/2025 & CM APPL. 14908-09/2025 TOWNPARK BUILDCON PVT LTD .....Petitioner Through: Mr Samyak Jain, Advocate. versus ACIT, CC 15 AND ORS .....Respondents Through: Mr Sanjay Kumar, SSC, Ms Monica Benjamin and Ms Easha Kadian, JSCs for the Revenue. CORAM: HON'BLE MR. JUSTICE VIBHU BAKHRU HON'BLE MR. JUSTICE TEJAS KARIA

O R D E R % 18.03.2025

1.

The present petition was listed on 12.03.2025 and the learned counsel for the Revenue was directed to seek instructions as to whether the issue involved in the present petition is covered by the earlier decision in Dinesh Jindal v. Assistant Commissioner of Income Tax, Central Circle 20, Delhi & Others: Neutral Citation: 2024:DHC:4554-DB.

2.

The petitioner has filed the present petition, inter alia, impugning a notice dated 06.10.2023 [hereafter the impugned notice] issued under Section 148 of the Income Tax Act, 1961 [hereafter the Act] in respect of the assessment year (AY) 2013-14. 3. The impugned notice indicates that a search was conducted on 02.03.2022 in case of Gaur group and other related entities. It is alleged that 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 21:21:49

during the course of the search conducted under Section 132 of the Act or the requisition made under Section 132A of the Act in case related to Gaur group and other related companies, incriminating information pertaining to the petitioner was found. The petitioner’s assessment for AY 2013-14 is sought to be reopened on the aforesaid basis.

4.

Concededly, the petitioner is not the searched person and, therefore, the principal question to be addressed is whether the assessment for the AY 2013-14 could be reopened under Section 153C of the Act.

5.

The controversy in the present case is covered by the decision of this court in Dinesh Jindal v. Assistant Commissioner of Income Tax, Central Circle 20, Delhi & Others (supra) as well as the decision in The Pr. Commissioner of Income Tax -Central-1 v. Ojjus Medicare Pvt. Ltd.: Neutral Citation: 2024:DHC:2629-DB. The assessment could be reopened for the period of ten years as stipulated in the proviso to Section 153A of the Act.

6.

In terms of the proviso to Section 149(1) of the Act, the assessments for the prior years could not be reopened if the same could not be opened as per the provisions as applicable at the material time. The relevant proviso to Section 149(1) of the Act is extracted below: “Provided that no notice under section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 1st day of April, 2021, if [a notice under section 148 or section 153A or section 153C could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of sub-section (1) of this section or section 153A or section 153C, as the case may be], as they stood immediately before the commencement of the Finance Act, 2021” 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 21:21:49

7.

Thus, in terms of Section 143C read with Section 153A of the Act, the assessments could be reopened for a period of ten years prior to be reckoned from the end of the AY in which the satisfaction that incriminating material has been found in the case of a person other than the searched person. In the present case, it is stated that there is no satisfaction note has been recorded. Thus, the period of ten years is required to reckoned from the end of the AY relevant to the year in which the impugned notice has been issued.

8.

The petitioner has set out a tabular statement setting out the calculation for the period of ten years of which assessments could be reopened. The said tabular statement is reprocured below: - Computation of the ten – year block period No. of years 2024-25 1 2023-24 2 2022-23 3 2021-22 4 2020-21 5 2019-20 6 2018-19 7 2017-18 8 2016-17 9 2015-16 10 Bar By Limitation 2014-15 11 2013-14 12

9.

In view of the above, the impugned notice is beyond the period of limitation. Accordingly, the petition is allowed and the impugned notice and all proceedings conducted pursuant to the impugned notice are set aside. 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 21:21:49

10.

The petition is disposed of in above terms. Pending applications are also disposed of. VIBHU BAKHRU, J TEJAS KARIA, J MARCH 18, 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 21:21:49

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