SHEETAL INTERNATIONAL PRIVATE LIMITED vs. CHIEF COMMISSIONER OF INCOME TAX, CENTRAL-02,DELHI & ANR.

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W.P.(C)/12632/2024HC DelhiDLHC01059296202404 November 2024Bench: HON'BLE MR. JUSTICE VIBHU BAKHRU,HON'BLE DR. JUSTICE SWARANA KANTA SHARMA3 pages
AI SummaryAllowed

What did the High Court hold?

The Delhi High Court allowed the writ petition. The Court relied on its own decision in Manju Somani v. Income Tax Officer Ward-70(1) & Ors and the Supreme Court's observations in Union of India & Others v. Rajeev Bansal. The Supreme Court in Rajeev Bansal clarified that 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, as per the old regime's Section 149(1)(b) and the first proviso to Section 149(1) of the new regime. This proviso limits the retrospective operation of Section 149(1)(b) of the new regime to protect assessees. Consequently, the impugned order dated 01.05.2024 under Section 148A(d) and the notice dated 01.05.2024 under Section 148 for AY 2017-18 were set aside. Pending applications were also disposed of.

What were the facts?

The petitioner, Sheetal International Private Limited, filed a writ petition before the Delhi High Court challenging an order dated 01.05.2024 passed under Section 148A(d) of the Income Tax Act, 1961, and a notice dated 01.05.2024 issued under Section 148 of the Act for Assessment Year 2017-18. The petitioner contended that the notice was issued beyond the period of limitation prescribed by the first proviso to Section 149(1) of the Act. The Revenue was represented by the Chief Commissioner of Income Tax, Central-02, Delhi, and another respondent. The High Court issued notice and the respondents' counsel accepted it.

What were the issues?

1. Whether the notice issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2017-18 is barred by limitation as per the first proviso to Section 149(1) of the Act? Assessee's Contention: The petitioner argued that the notice was issued beyond the period of limitation prescribed by the first proviso to Section 149(1) of the Act. The petitioner relied on the decision of the Delhi High Court in Manju Somani v. Income Tax Officer Ward-70(1) & Ors: Neutral Citation: 2024:DHC:5411-DB. Revenue's Contention: The judgment does not record any specific arguments made by the Revenue. However, the Supreme Court's decision in Union of India & Others v. Rajeev Bansal: 2024 SCC OnLine SC 2693 was discussed, which pertains to the interpretation of the proviso to Section 149(1)(b) concerning time limits for issuing notices under the new regime.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

$~7 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 12632/2024 and CM APPLs. 52458-59/2024 SHEETAL INTERNATIONAL PRIVATE LIMITED.....Petitioner Through: Mr Sameer Rohatgi with Mr Kartikey Singh and Mr Naman Gupta, Advocates. versus CHIEF COMMISSIONER OF INCOME TAX, CENTRAL- 02,DELHI & ANR. .....Respondents Through: Mr Siddhartha Sinha, Sr. Standing Counsel. CORAM: HON'BLE MR. JUSTICE VIBHU BAKHRU HON'BLE MS. JUSTICE SWARANA KANTA SHARMA O R D E R % 04.11.2024 1. Issue notice. 2. Learned counsel appearing for the respondents accepts notice. 3. The petitioner has filed the present petition, inter alia, impugning an order dated 01.05.2024 (hereafter the impugned order) issued under Section 148A(d) of the Income Tax Act, 1961 (hereafter the Act) for the assessment year (AY) 2017-18 as well as the notice dated 01.05.2024 issued under Section 148 of the Act. 4. The petitioner contends that the said notice was issued beyond the period of limitation as prescribed in first proviso to Section 149(1) of the Act. 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 04/07/2025 at 02:30:28

5.

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. 6. It is also relevant to note that the Supreme Court in a recent decision of Union of India & Others v. Rajeev Bansal: 2024 SCC OnLine SC 2693 has observed as under: “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 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 04/07/2025 at 02:30:28

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.” 7. In view of the above, the present petition is allowed. The impugned order dated 01.05.2024 as well as the notice issued under Section 148 in respect of the AY 2017-18 are set aside. 8. Pending applications also stand disposed of. VIBHU BAKHRU, J SWARANA KANTA SHARMA, J NOVEMBER 4, 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 04/07/2025 at 02:30:28

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