NIMIT BUILDERS PRIVATE LIMITED (ALSO AS SUCCESSOR IN THE INTEREST OF JK JEET CLOTHES PRIVATE LIMITE vs. ASSISTANT COMMISSIONER OF INCOME TAX & ORS.

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W.P.(C)/6738/2023HC DelhiDLHC01019312202310 March 2025Author: HON'BLE MR. JUSTICE YASHWANT VARMA,HON'BLE MR. JUSTICE HARISH VAIDYANATHAN SHANKAR4 pages
AI SummaryRemanded

What did the High Court hold?

The Delhi High Court disposed of the writ petition by directing the concerned Assessing Officers (AOs) to evaluate the individual show cause notices (SCNs) under Section 148 of the Income Tax Act, 1961. This evaluation must consider the judgments of the Supreme Court in Union of India v. Rajeev Bansal and of the Delhi High Court in Ram Balram Buildhome Pvt. Ltd. v. Income Tax Officer & Anr. The AOs are also to bear in mind the Court's previous judgments in T.K.S. Builders, Abhinav Jindal, and Naveen Kumar Gupta, which have settled issues concerning sanction under Section 151 and the authority of the AO to commence reassessment. The AOs must pass a reasoned and speaking order addressing the impact of these judgments on the impugned reassessment notices, determining whether they survive or should be recalled. The petitioner is at liberty to challenge any adverse orders.

What were the facts?

The petitioner, NIMIT Builders Private Limited, assails a reassessment action initiated by the Assistant Commissioner of Income Tax for Assessment Year 2013-14. The primary challenge concerns the surviving period of the reassessment notice. The notice under Section 148 (old regime) was issued on 26.06.2021. Following a communication regarding information pursuant to the Supreme Court's decision in Ashish Agarwal, the petitioner filed a reply on 07.06.2022. An order under Section 148A(d) was passed on 27.07.2022, and a notice under Section 148 was issued on the same date, with sanction obtained from the PCCIT. The petitioner contends the reassessment is time-barred.

What were the issues?

1. Whether the notice issued under Section 148 for Assessment Year 2013-14 is time-barred, considering the provisions of Section 149 of the Income Tax Act, 1961, and the impact of the Taxation and Other Laws (Relaxation of Certain Provisions) Act, 2020 (TOLA)? Assessee's Contention: The assessee argues that the notice issued under Section 148 on 27.07.2022 is beyond the permissible period of limitation, which, after considering the extended period due to TOLA and the proviso to Section 149, expired on 17.06.2022. They rely on the computation chart and the Supreme Court's decision in Union of India v. Rajeev Bansal. Revenue's Contention: The judgment does not record specific arguments from the revenue regarding the limitation period. However, the revenue is the respondent in the writ petition challenging the reassessment action.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A,Section 149,Section 151,Section 153C

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
$~52 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 6738/2023 & CM APPL. 26373/2023 (Stay) NIMIT BUILDERS PRIVATE LIMITED (ALSO AS SUCCESSOR IN THE INTEREST OF JK JEET CLOTHES PRIVATE LIMITED AND VERMA HOMES PRIVATE LIMITED) .....Petitioner Through: Mr. Vaibhav Kulkarni and Mr. Aditya Bali, Advs. versus ASSISTANT COMMISSIONER OF INCOME TAX & ORS. .....Respondents Through: Mr. Gaurav Gupta, SSC along with Mr. Shivendra Singh and Mr. Yojit Pareek, JSCs. CORAM: HON'BLE MR. JUSTICE YASHWANT VARMA HON'BLE MR. JUSTICE HARISH VAIDYANATHAN SHANKAR

O R D E R %

10.03.

2025

1.

The instant writ petition had been preferred assailing the reassessment action initiated by the respondent pertaining to Assessment Year [‘AY’] 2013-14. We take note of the principal challenge which now remains and pertains to the issue of surviving period.

2.

The petitioner, in order to buttress its claim of the proceedings being time barred, has placed for our consideration the following chart:

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 18:20:51

SUMMARY CHART A. Key Facts:

S. No PARTICULARS DATE Relevant Pg./ Ann No. of Writ Petition

1.

Notice issued under section 148 (old regime) 26.06.2021 19

2.

Letter communicating information pursuant to SC decision in Ashish Agarwal – reply to be filed by 10.06.2022 18.05.2022 08.06.2022 81-89/ ‘A’

3.

Reply filed by Petitioner 07.06.2022 402-426/ ‘M’

4.

Order u/s 148A(d) 27.07.2022 90-103/ ‘B’

5.

Notice issued u/s 148 – Sanction obtained from PCCIT 27.07.2022 104-106/ ‘C’

B. COMPUTATION OF LIMITATION AS PER DECISION OF UOI VS. RAJEEV BANSAL:

S. No.

SC Paras

1.

Assessment Year 2013-14

2.

Period of limitation u/s 149 [3 years or 6 years] 6 years

3.

Original Period of limitation u/s 149 31.03.2020

4.

Extended period of limitation as per IT Act read with TOLA 30.06.2021 Paras 65-69

5.

Sanction to be obtained u/s 151 till 30.06.2021 [within 3 years] PCCIT

6.

Date of original notice u/s 148 - deemed SCN u/s 148A(b) 26.06.2021

7.

Time surviving from date of issuance of deemed SCN till expiry of period as extended by TOLA [from 26.06.2021 till 30.06.2021] 4 days Paras 109-113

8.

Extended to 7 days as per proviso to section 149 7 days

9.

Period of deemed stay to be excluded as per 3rd proviso to section 149 [Date of Original 148 till date allowed to file reply to assessee] 26.06.2021 to 10.06.2022 Paras 105-107

10.

Last date for issuing notice u/s 148 [i.e., 10.06.2022 + 7 days] 17.06.2022 Para 77

11.

Actual date of issuance of notice u/s 148 27.07.2022

12.

Notice u/s 148 issued under new regime beyond the period of 6 years which expired on 17.06.2022. Thus, time barred– invalid Para 77 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 18:20:51

3.

The said question would have to be necessarily examined by the Jurisdictional Assessing Officer bearing in mind the judgment of the Supreme Court in Union of India v. Rajeev Bansal [2024 SCC OnLine SC 2693] as well as of this Court in Ram Balram Buildhome Pvt. Ltd. v. Income Tax Officer & Anr. [2025 SCC OnLine Del 481].

4.

Dealing with identical issues, we had disposed of a batch of writ petitions by our judgment rendered in Kanwaljeet Kaur vs. Commissioner of Income Tax [2025 SCC OnLine Del 605] in the following terms:

“27. We accordingly dispose of this batch of writ petitions by directing the concerned AOs to evaluate the individual SCNs' under Section 148 of the Act bearing in mind our judgments in T.K.S. Builders, Abhinav Jindal and Naveen Kumar Gupta. These decisions have conclusively settled issues pertaining to the accordal of sanction under Section 151 as well as the authority of the jurisdictional AO to commence and undertake reassessment. Those decisions also lay at rest the challenge which the writ petitioners had raised that an AO is bound to adhere to the procedure prescribed by Section 153C in cases emanating from a search.

28.

A similar exercise would have to be undertaken to examine the issue of surviving period in respect of each individual noticee under Section 148 and which would necessarily be guided by the judgments of Rajeev Bansal and Ram Balram.

29.

The concerned AOs shall consequently pass a reasoned and speaking order dealing with the impact of the judgments referred to above upon the impugned reassessment notices and in the manner indicated in paras 27 and 28 of this order. That decision shall thus render a finding on whether the impugned reassessment notices would survive or be liable to be recalled. It shall be open to the writ petitioners to assail any adverse orders that may come to be passed pursuant to the above in accordance with law.”

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 18:20:51

5.

Consequently, and in light of the above, we dispose of the writ petition on terms identical to those provided in paragraphs 27 to 29 of Kanwaljeet Kaur.

YASHWANT VARMA, J

HARISH VAIDYANATHAN SHANKAR, J MARCH 10, 2025/RW

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 18:20:51

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