ADHIR SACHDEVA vs. ASSISTANT COMMISSIONER OF INCOME TAX & ORS.

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W.P.(C)/17647/2024HC DelhiDLHC01096007202420 December 2024Bench: HON'BLE MR. JUSTICE TUSHAR RAO GEDELA,HON'BLE THE ACTING CHIEF JUSTICE3 pages
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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 2015-16, is barred by limitation. The Court relied on the Supreme Court's decision in Union of India & Others v. Rajeev Bansal, which clarified the application of the proviso to Section 149(1)(b) of the Act. The Court noted that the six-year period 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 by limitation. The Court found merit in the petitioner's argument and the respondent's concurrence. Therefore, the impugned notice was set aside. The petition was allowed in terms of this decision, and pending applications were disposed of.

What were the facts?

The petitioner, Adhir Sachdeva, filed a writ petition challenging a notice dated 29.08.2024 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) preceding the Section 148 notice. The petitioner argued that the issuance of the notice was barred by limitation. The respondent, Assistant Commissioner of Income Tax, concurred with this submission.

What were the issues?

1. Whether the notice 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? Assessee's contention: The petitioner argued that the notice issued under Section 148 is barred by limitation. This contention was based on the decision of the Delhi High Court in Manju Somani v. Income Tax Officer Ward-70(1) & Ors and the Supreme Court in Union of India & Others v. Rajeev Bansal. Specifically, the petitioner highlighted that the six-year period from the end of AY 2015-16 expired on 31.03.2022, and the impugned notice was issued thereafter. Revenue's contention: The learned counsel for the respondent concurred with the petitioner's submission that the notice is barred by limitation.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

$~65 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 17647/2024 and CM APPLs. 75054-55/2024 ADHIR SACHDEVA .....Petitioner Through: Mr Ved Jain with Mr Nischay Kantoor, Advocates. versus ASSISTANT COMMISSIONER OF INCOME TAX & ORS. .....Respondents Through: Mr Anurag Ojha, SSC with Ms Hemlata Rawat and Mr V.K. Saksena, Advocates. CORAM: HON'BLE THE ACTING CHIEF JUSTICE HON'BLE MR. JUSTICE TUSHAR RAO GEDELA O R D E R % 20.12.2024 1. The petitioner has filed the present petition, inter alia, impugning a notice dated 29.08.2024 (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 India & Others v. Rajeev Bansal : 2024 SCC OnLine SC 2693 and drew 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 30/12/2024 at 12:10:39

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 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 30/12/2024 at 12:10:39

(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 applications also stand disposed of. VIBHU BAKHRU, ACJ TUSHAR RAO GEDELA, J DECEMBER 20, 2024/tr 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 30/12/2024 at 12:10:39

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