JANUS INFRASTRUCTURE PROJECTS PRIVATE LIMITED vs. ASSISTANT COMMISSIONER OF INCOME TAX

PDF · subscribers
W.P.(C)/249/2025HC DelhiDLHC01000225202527 February 2025Author: HON'BLE MR. JUSTICE YASHWANT VARMA,HON'BLE MR. JUSTICE HARISH VAIDYANATHAN SHANKAR6 pages
AI SummaryAllowed

What did the High Court hold?

The Delhi High Court held that the notice dated February 6, 2024, issued under Section 148 of the Income Tax Act, 1961, for reassessment of the petitioner for AY 2014-15, was unsustainable. The court reasoned that for reassessments pertaining to AYs prior to April 1, 2021, the action must comply with the timeframes specified under Section 149(1)(b), Section 153A, or Section 153C, as they existed before the Finance Act, 2021. The court applied its previous decisions in Filatex India Ltd., Flowmore Limited, and Principal Commissioner of Income Tax-1 vs. Ojjus Medicare Pvt. Ltd. It was established that in cases of search under Section 132 or requisition under Section 132A, and subsequent proceedings under Section 153C, the reckoning of the ten-year block period for reassessment is from the date of receipt of books of account or documents by the jurisdictional Assessing Officer. The court provided a computation showing that AY 2014-15 falls beyond the ten-year block period when reckoned from the date of the impugned Section 148 notice dated February 6, 2024. Consequently, the writ petition was allowed, and the impugned notice was quashed.

What were the facts?

The petitioner, Janus Infrastructure Projects Private Limited, challenged a notice dated February 6, 2024, issued under Section 148 of the Income Tax Act, 1961, for reassessment for Assessment Year (AY) 2014-15. The notice was issued under the amended reassessment regime effective from April 1, 2021. The petitioner argued that the reassessment action was time-barred. The revenue contended that the notice was valid. The court noted that a search and seizure operation on a third party on March 2, 2022, led to the petitioner receiving a notice under Section 148 on October 6, 2023. However, the court's analysis focused on the applicability of the proviso to Section 149(1) and the time limits under Section 153C read with Section 153A.

What were the issues?

1. Whether the notice dated February 6, 2024, issued under Section 148 of the Income Tax Act, 1961, for reassessment for AY 2014-15 is sustainable in light of the amended reassessment regime and the time limitations prescribed under Section 149(1)(b) and the proviso thereto, read with Section 153C and Section 153A of the Act. Assessee's Contention: The reassessment for AY 2014-15 is barred by limitation. The action for reassessment, particularly in cases involving a search on a third party and subsequent notice under Section 148, must comply with the timeframes stipulated under the proviso to Section 149(1) and Section 153C/153A as they stood prior to the Finance Act, 2021. The ten-year block period for reassessment under Section 153C, when reckoned from the date of receipt of seized documents by the jurisdictional AO, would not extend to AY 2014-15. Revenue's Contention: The judgment does not record specific contentions from the revenue regarding the time limitation, but it implies the revenue sought to sustain the reassessment notice.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
W.P.(C) 249/2025 Page 1 of 6 $~48 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 249/2025 JANUS INFRASTRUCTURE PROJECTS PRIVATE LIMITED .....Petitioner Through: Mr. Arvind Kumar and Ms. Devina Sharma, Advs. versus ASSISTANT COMMISSIONER OF INCOME TAX .....Respondent Through: Mr. Puneet Rai, SSC along with Mr. Ashvini Kumar and Mr. Rishabh Nangia, JSCs. CORAM: HON'BLE MR. JUSTICE YASHWANT VARMA HON'BLE MR. JUSTICE HARISH VAIDYANATHAN SHANKAR % 27.02.2025

O R D E R

1.

The writ petitioner impugns the notice dated 06 February 2024 issued under Section 148 of the Income Tax Act, 19611. The aforesaid notice seeks to reassess the petitioner for Assessment Year2

2.

Undisputedly, and since the notice was issued on 06 February 2024, it would be the amended regime of reassessment which came into effect from 01 April 2021 which would be applicable. The action for reassessment would thus have to satisfy the provisions made in the First Proviso to Section 149(1) of the Act. The said provision reads as follows:

2014-15. 1 Act 2 AY 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 20:47:44 “[149. Time limit for notice.— (1) No notice under Section 148 shall be issued for the relevant assessment year,— (a) if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b); [(b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax, represented in the form of (i) an asset; — (ii) expenditure in respect of a transaction or in relation to an event or occasion; or (iii) an entry or entries in the books of account, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more:] 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 153-A or Section 153-C 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 153-A or Section 153-C, as the case may be], as they stood immediately before the commencement of the Finance Act, 2021: Provided further that the provisions of this sub-section shall not apply in a case, where a notice under Section 153-A, or Section 153-C read with Section 153-A, is required to be issued in relation to a search initiated under Section 132 or books of account, other documents or any assets requisitioned under Section 132-A, on or before the 31st day of March, 2021…

3.

As is evident from a reading of that provision any action for reassessment pertaining to an AY prior to 01 April 2021 can be sustained only if it be compliant with the timeframes specified under Section 149(1)(b), Section 153A or Section 153C as the case may be and on the anvil of those provisions as they existed prior to the commencement of 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 20:47:44 4. Viewed in that light, it is manifest that the assessment for AY 2014-15 could not have been reopened.

5.

This we note bearing in mind the following additional facts. The record would reflect that pursuant to a search and seizure operation conducted in respect of a third person on 02 March 2022, the petitioner was served a notice under Section 148 on 06 October 2023. Undisputedly and for the purposes of reopening, bearing in mind the proviso to Section 149(1), action could have been initiated only up to AY 2015-16. 6. Commissioner of Income Tax & Anr.3 and Flowmore Limited vs. Deputy Commissioner of Income Tax4, where while dealing with an identical question, upon taking note of the manner in which the relevant period under Section 153C is liable to be reckoned, and which we had otherwise dealt with in some detail in our decision rendered in Principal Commissioner of Income Tax-1 vs. Ojjus Medicare Pvt. Ltd.5 “3. , we had observed as follows: As is evident from the prima facie observations which came to be rendered by us on that occasion, the reassessment which is sought to be initiated for Assessment Year [“AY”] 2012-13 would not sustain bearing in mind the prescription of limitation as contained in Section 149(1)(b) of the Income Tax Act, 1961 [“Act”] as it stood at the relevant time

4.

We note that while dealing with a similar question of computation of the time limit for the “relevant assessment year” as provided under Explanation 1 to Section 153A of the Act, we had in the case of Principal Commissioner of Income Tax-Central-1 v. Ojjus Medicare Pvt. Ltd. [2024 SCC Online Del 2439] held as follows:- .

3 W.P.(C) 12148/2023 4 W.P.(C) 3738/2024 5 2024 SCC OnLine Del 2439 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 20:47:44 “D. The First Proviso to Section 153C introduces a legal fiction on the basis of which the commencement date for computation of the six year or the ten year block is deemed to be the date of receipt of books of accounts by the jurisdictional AO. E. The reckoning of the six AYs' would require one to firstly identify the FY in which the search was undertaken and which would lead to the ascertainment of the AY relevant to the previous year of search. The block of six AYs' would consequently be those which immediately precede the AY relevant to the year of search. In the case of a search assessment undertaken in terms of Section 153C , the solitary distinction would be that the previous year of search would stand substituted by the date or the year in which the books of accounts or documents and assets seized are handed over to the jurisdictional AO as opposed to the year of search which constitutes the basis for an assessment under Section 153A. The identification of the starting block for the purposes of computation of the six and the ten year period is governed by the First Proviso to Section 153C, which significantly shifts the reference point spoken of in Section 153A(1), while defining the point from which the period of the “relevant assessment year” is to be calculated, to the date of receipt of the books of accounts, documents or assets seized by the jurisdictional AO of the non- searched person. The shift of the relevant date in the case of a non-searched person being regulated by the First Proviso of Section 153C(1) is an issue which is no longer res integra and stands authoritatively settled by virtue of the decisions of this Court in SSP Aviation and RRJ Securities as well as the decision of the Supreme Court in Jasjit Singh. The aforesaid legal position also stood reiterated by the Supreme Court in Vikram Sujitkumar Bhatia. The submission of the respondents, therefore, that the block periods would have to be reckoned with reference to the date of search can neither be countenanced nor accepted. F. While the identification and computation of the six AYs' hinges upon the phrase “immediately preceding the assessment year relevant to the previous year” of search, the ten year period would have to be reckoned from the 31st day of March of the AY relevant to the year of search. This, since undisputedly, Explanation 1 of Section 153A requires us to reckon it “from the end of the assessment year”. This distinction would have to necessarily be acknowledged in light of the statute having consciously adopted the phraseology “immediately preceding” when it be in relation to the six year period and employing the expression “from the end of the assessment year” while speaking of the ten year block.” 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 20:47:44 5. In view of the aforesaid, we find ourselves unable to sustain the impugned notice dated 13 March 2023 issued under Section 148 of the Act.

6.

The writ petition is accordingly allowed and the impugned order dated 18 May 2023 disposing off the objections of the petitioner is hereby quashed. We in consequence also quash the notice dated 13 March 2023 purporting to commence proceedings under Section 148 of the Act

7.

Bearing in mind the aforesaid, the computation of the “relevant assessment year” from the date of the impugned Section 148 notice dated 06 February 2024 would be as follows: .” A.Y. 2024-25 1st Year A.Y. 2023-24 2nd Year A.Y. 2022-23 3rd Year A.Y. 2021-22 4th Year A.Y. 2020-21 5th Year A.Y. 2019-20 6th Year A.Y. 2018-19 7th Year A.Y. 2017-18 8th Year A.Y. 2016-17 9th Year A.Y. 2015-16 10th Year A.Y. 2014-15 11th Year (beyond terminal point of 10 years)

8.

It is therefore ex facie evident that AY 2014-15 falls beyond the ten-year block period as set out under Section 153C read with Section 153A of the Act. Consequently, the impugned notice is rendered unsustainable.

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 20:47:44 9. In view of the aforesaid, we allow the instant writ petition and quash the notice dated 06 February 2024 referable to Section 148 of the Act.

YASHWANT VARMA, J.

HARISH VAIDYANATHAN SHANKAR, J. FEBRUARY 27, 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 20:47:44

More judgments on Section 148

All 35,022 judgments and leading authorities on Section 148 →

Recent GST High Court judgments

Search GST case law →