TRIVENI IMPEX PVT LTD vs. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 25 1 DELHI & ORS.

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W.P.(C)/14593/2024HC DelhiDLHC01071007202418 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 dated August 30, 2024, issued under Section 148 of the Income Tax Act, 1961, for the assessment year 2020-21, is barred by limitation. The Court reasoned that the period of two years for the relevant assessment year expired on March 31, 2023. Since the notice was issued after this date, it was beyond the permissible time limit. The Court found the submissions of the petitioner to be valid and noted that the respondents were unable to provide any counter-arguments. Consequently, the impugned notice was set aside. The ratio decidendi is that notices under Section 148 for assessment years prior to the new regime's applicability must adhere to the time limitations prescribed under the old regime, and if these limitations have expired, such notices cannot be issued. The petition was allowed in terms of setting aside the notice.

What were the facts?

The petitioner, Triveni Impex Pvt Ltd, filed a writ petition challenging a notice dated August 30, 2024, issued under Section 148 of the Income Tax Act, 1961, for the assessment year 2020-21. 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 issuance of the Section 148 notice was barred by limitation. The respondents, Assistant Commissioner of Income Tax Circle 25(1), Delhi, and others, were unable to counter the petitioner's submissions.

What were the issues?

1. Whether the notice issued under Section 148 of the Income Tax Act, 1961, for the assessment year 2020-21, is barred by limitation, considering the provisions of the Act and the Supreme Court's decision in Union of India & Others v. Rajeev Bansal? Assessee's Contention: The learned counsel for the petitioner argued that the period of two years for the relevant assessment year 2020-21 expired on March 31, 2023. As the impugned notice was issued thereafter, it is barred by limitation. The petitioner relied on the decision of the Delhi High Court in Manju Somani v. Income Tax Officer Ward-70(1) & Ors. and passages from the Supreme Court judgment in Union of India & Others v. Rajeev Bansal, particularly regarding the interplay between the old and new regimes for issuing notices under Section 148 and the time limits specified under Section 149(1)(b). Revenue's Contention: The learned counsel for the respondents was unable to counter the submissions made by the petitioner.

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

$~79 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 14593/2024 CM APPL. 61228/2024 CM APPL. 61229/2024

TRIVENI IMPEX PVT LTD

.....Petitioner

Through: Mr. Ved Jain, Mr. Nischey Kantoor,

Ms. Somya Dodiya, Mr. Divyansh

Dubey, Ms. Somya Dodiya and

Mr.Pawan Kumar Goenka, Advs.

versus

ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 25 1

DELHI & ORS.

.....Respondents

Through: Mr. Sunil Agarwal, SSC, Mr.

Shivansh B. Pahdya, JSC, Mr. Viplav

Acharya, JSC and Mr. Utkarsh

Tiwari, Adv.

CORAM:

HON'BLE MR. JUSTICE VIBHU BAKHRU

HON'BLE MS. JUSTICE SWARANA KANTA SHARMA

O R D E R %

18.10.2024 1. The petitioner has filed the present petition, inter alia, impugning a notice dated 30.08.2024 (hereafter the impugned notice) issued under Section 148 of the Income Tax Act, 1961 (hereafter the Act) for the assessment year 2020-21. 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. 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 28/10/2024 at 12:13:36

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 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 28/10/2024 at 12:13:36

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 two years for the relevant assessment year 2020-21 expired on 31.03.2023. The impugned notice has been issued thereafter, and the same is thus barred by limitation. 6. The learned counsel for the respondents is unable to counter the said submissions. 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, J

SWARANA KANTA SHARMA, J OCTOBER 18, 2024 A

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 28/10/2024 at 12:13:36

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