HALDIRAM SNACKS PRIVATE LIMITED vs. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 26, DELHI & ANR.

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W.P.(C)/14312/2024HC DelhiDLHC01069272202409 October 2024Bench: HON'BLE MR. JUSTICE VIBHU BAKHRU,HON'BLE DR. JUSTICE SWARANA KANTA SHARMA3 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 the assessment year 2016-17 was barred by limitation. The Court relied on the Supreme Court's decision in Union of India & Others v. Rajeev Bansal: 2024 SCC OnLine SC 2693, which 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. In this case, the six-year period for assessment year 2016-17 expired on 31.03.2023, and the notice was issued thereafter. Consequently, the impugned notice was set aside. The petition was allowed in terms of the setting aside of the notice, and pending applications were disposed of.

What were the facts?

The petitioner, Haldiram Snacks 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 the assessment year 2016-17. The petitioner also challenged the order passed under Section 148A(d) of the Act, which preceded the Section 148 notice. The petitioner contended that the issuance of the notice was barred by limitation. The revenue, represented by the Deputy Commissioner of Income Tax, Central Circle 26, Delhi, was unable to counter the petitioner's submissions.

What were the issues?

1. Whether a notice issued under Section 148 of the Income Tax Act, 1961, for the assessment year 2016-17, after the expiry of the six-year period from the end of the relevant assessment year, is barred by limitation, considering the provisions of Section 149(1)(b) of the old regime and the first proviso to Section 149(1)(b) of the new regime as interpreted by the Supreme Court in Union of India & Others v. Rajeev Bansal: 2024 SCC OnLine SC 2693. Assessee's contention: The petitioner argued that the notice is barred by limitation as the period of six years for the assessment year 2016-17 expired on 31.03.2023, and the notice was issued thereafter. The petitioner relied on the decision of this Court in Manju Somani v. Income Tax Officer Ward-70(1) & Ors: 2024:DHC:5411-DB and the Supreme Court's judgment in Union of India & Others v. Rajeev Bansal: 2024 SCC OnLine SC 2693, particularly passages concerning the time limits for issuing notices under the new regime and the impact of the proviso to Section 149(1)(b). Revenue's contention: The respondent was unable to counter the submissions made by the petitioner.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

$~72 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 14312/2024 CM APPL. 59919/2024 CM APPL. 59920/2024

HALDIRAM SNACKS PRIVATE LIMITED .....Petitioner Through: Mr. Ajay Wadhwa, Ms. Ragini Handa and Mr. Ujjwal Jain, Advocates

versus

DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 26, DELHI & ANR.

.....Respondents

Through: Mr. Shlok Chandra, SSC with Ms. Naincy Jain and Ms. Madhavi Shukla, JSCs and Mr. Sushant Pandey, Advocate

CORAM:

HON'BLE MR. JUSTICE VIBHU BAKHRU

HON'BLE MS. JUSTICE SWARANA KANTA SHARMA

O R D E R %

09.10.2024 1. The petitioner has filed the present petition impugning a notice dated 31.08.2024 (hereafter the impugned notice) issued under Section 148 of the Income Tax Act, 1961 (hereafter the Act) in respect of the assessment year 2016-17. The petitioner also impugns the order passed under Section 148A(d) of the Act prior to the issuance of the impugned notice. 2. 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. 3. Mr Wadhwa, also referred to the decision of the Supreme Court in 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 02:36:39

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 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.”

4.

In the present case, the period of six years for the relevant assessment year 2016-17 expired on 31.03.2023. The impugned notice has been issued 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 02:36:39

thereafter, and the same is thus barred by limitation. 5. The learned counsel for the respondent is unable to counter the said submissions. 6. In view of the above, the impugned notice is set aside. 7. The petition is allowed in the aforesaid terms. 8. Pending applications also stand disposed of.

VIBHU BAKHRU, J

SWARANA KANTA SHARMA, J OCTOBER 09, 2024 SV

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 02:36:39

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