NEERA GUPTA vs. ITO, WARD 46(4), DELHI

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W.P.(C)/17352/2024HC DelhiDLHC01094515202417 December 2024Bench: HON'BLE THE ACTING CHIEF JUSTICE,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 16.10.2024, issued under Section 148 of the Income Tax Act, 1961, for AY 2015-16, is barred by limitation. The Court reasoned that the period of six years from the end of the relevant assessment year (AY 2015-16) expired on 31.03.2022. As the notice was issued after this date, it falls outside the permissible time limits as interpreted by the Supreme Court in Union of India & Others v. Rajeev Bansal, which clarifies that the new time limits under Section 149(1)(b) of the Act apply prospectively and the proviso to Section 149(1)(b) of the old regime limits the retrospective operation. The Court noted that the respondent's counsel concurred with this view. Consequently, the impugned notice was set aside, and the petition was allowed. The operative direction was the setting aside of the notice.

What were the facts?

The petitioner, Neera Gupta, filed a writ petition before the Delhi High Court challenging a notice dated 16.10.2024 issued under Section 148 of the Income Tax Act, 1961, for Assessment Year (AY) 2015-16. The petition also challenged the notice under Section 148A(b) and the order passed under Section 148A(d) that preceded the Section 148 notice. The petitioner argued that the issue was covered by previous High Court and Supreme Court decisions. The respondent, ITO, Ward 46(4), Delhi, concurred with the petitioner's submission regarding the limitation period.

What were the issues?

1. Whether the notice dated 16.10.2024 issued under Section 148 of the Income Tax Act, 1961, for AY 2015-16 is barred by limitation, in light of the provisions of Section 149(1)(b) of the Act (as interpreted by the Supreme Court in Union of India & Others v. Rajeev Bansal)? Assessee's Contention: The petitioner argued that the issue is covered by the decision in Manju Somani v. Income Tax Officer Ward-70(1) & Ors. and the Supreme Court's ruling in Union of India & Others v. Rajeev Bansal. Specifically, the petitioner contended that the six-year period from the end of AY 2015-16 expired on 31.03.2022, making the notice issued thereafter barred by limitation, as per the interpretation of the proviso to Section 149(1)(b) of the old regime which limits the retrospective operation of the new time limits. Revenue's Contention: The learned counsel for the respondent concurred with the petitioner's view on the limitation period.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A,Section 149(1)(b)

AI-generated summary — verify with the full judgment below

$~52 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 17352/2024, CM APPL. 73891/2024 & CM APPL. 73892/2024

NEERA GUPTA

.....Petitioner Through: Ms. Rano Jain, Mr. Venketesh Chaurasia, Ms. Renu Arora, Ms. Sakshi Rustagi and Ms. Sakshi Srivastava, Advocates.

versus

ITO, WARD 46(4), DELHI

.....Respondent Through: Mr. Siddhartha Sinha, Senior Standing Counsel with Ms. Anu Priya Nisha Minz, Advocate.

CORAM:

HON'BLE THE ACTING CHIEF JUSTICE

HON'BLE MR. JUSTICE TUSHAR RAO GEDELA

O R D E R %

17.12.2024 1. The petitioner has filed the present petition, inter alia, impugning a notice dated 16.10.2024 (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 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 24/12/2024 at 12:00:55

Tax Officer Ward-70(1) & Ors: Neutral Citation: 2024:DHC:5411-DB. 4. Learned counsel also referred to the decision of the Supreme Court in Union of 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. ***

***

*** 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 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 24/12/2024 at 12:00:55

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 (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.

VIBHU BAKHRU, ACJ

TUSHAR RAO GEDELA, J DECEMBER 17, 2024 yrj

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 24/12/2024 at 12:00:55

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