LINEN DESIGN COMPANY PRIVATE LIMITED vs. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 13(1) DELHI & ORS.

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W.P.(C)/2403/2025HC DelhiDLHC01009455202525 February 2025Author: HON'BLE CHIEF JUSTICE DEVENDRA KUMAR UPADHYAYA,HON'BLE MR. JUSTICE TUSHAR RAO GEDELA3 pages
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What did the High Court hold?

The Delhi High Court held that the impugned notice dated 31.08.2024, issued under Section 148 of the Income Tax Act, 1961, for AY 2015-16, is barred by limitation. The Court found that the period of six years from the end of the relevant assessment year (AY 2015-16) expired on 31.03.2022. As the impugned notice was issued after this date, it was consequently barred. The Court's reasoning was based on the submissions made by the petitioner, which were supported by the decisions in Manju Somani and Union of India v. Rajeev Bansal, particularly the interpretation of the time limits for issuing notices under the old regime as applied to the new regime. The Court accepted the concurrence of the respondent's counsel on this point. The impugned notice was set aside, and the petition was allowed in these terms. No other issue was expressly left undecided.

What were the facts?

The petitioner, Linen Design Company Private Limited, filed a writ petition before the Delhi High Court challenging a notice dated 31.08.2024 issued under Section 148 of the Income Tax Act, 1961, for Assessment Year (AY) 2015-16. The petition also challenged the preceding notices issued under Section 148A(b) and the order passed under Section 148A(d). The petitioner contended that the issuance of the Section 148 notice was barred by limitation. The respondent, Deputy Commissioner of Income Tax Circle 13(1) Delhi, concurred with the petitioner's submission regarding the limitation period.

What were the issues?

1. Whether the notice dated 31.08.2024, issued under Section 148 of the Income Tax Act, 1961, for AY 2015-16, is barred by limitation, considering the provisions of the Act and relevant judicial precedents? (Question of law and mixed fact and law, turning on Section 148 and Section 149 of the Income Tax Act, 1961). 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 period of six years from the end of AY 2015-16 expired on 31.03.2022, and since the impugned notice was issued thereafter, it is barred by limitation. The petitioner relied on passages from the Rajeev Bansal judgment highlighting the interplay between the old and new regimes for issuing notices under Section 148 and the limitations imposed by the proviso to Section 149(1)(b). Revenue's Contention: The learned counsel for the respondent concurred with the petitioner's view on the aforesaid point of limitation.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A,Section 149

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
$~62 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 2403/2025, CM APPL. 11336/2025 & CM APPL. 11337/2025 LINEN DESIGN COMPANY PRIVATE LIMITED .....Petitioner Through: Mr. Ved Jain, Mr. Nischay Kantoor and Ms. Soniya Dodeja, Advocates. versus DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 13(1) DELHI & ORS. .....Respondent Through: Mr. Shlok Chandra, SSC with Ms. Nancy Jain and Ms. Madhavi Shukla, JSCs. CORAM: HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE TUSHAR RAO GEDELA

O R D E R %

25.02.

2025

1.

The petitioner has filed the present petition, inter alia, impugning a notice dated 31.08.2024 (hereafter the impugned notice) issued under Section 148 of the Income Tax Act, 1961 (hereafter the Act) for the assessment year (AY) 2015-16. 2. 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.

3.

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.

4.

Mr Jain, also referred to the decision of the Supreme Court in Union of 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 22:59:35

India & Others v. Rajeev Bansal : 2024 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. ***

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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 assesses.”

5.

In the present case, the period of six years from the end of the relevant 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 22:59:35

(AY) 2015-16 expired on 31.03.2022. The impugned notice has been issued thereafter, and the same is thus barred by limitation.

6.

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

7.

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

8.

The petition is allowed in the aforesaid terms. Pending application also stands disposed of.

DEVENDRA KUMAR UPADHYAYA, CJ

TUSHAR RAO GEDELA, J FEBRUARY 25, 2025 yrj

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 22:59:35

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