AASHRIT CAPITAL LIMITED vs. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE -1 1 1, DELHI

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W.P.(C)/14663/2024HC DelhiDLHC01071711202421 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 31.08.2024, issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2017-18, is barred by limitation. The Court relied on its own decision in Manju Somani v. Income Tax Officer Ward-70(1) & Ors and the Supreme Court's judgment in Union of India & Others v. Rajeev Bansal. The reasoning was that the six-year period for issuing a notice under the old regime for AY 2017-18 expired on 31.03.2024. As the impugned notice was issued after this date, it was beyond the permissible time limit. The Court noted that the revenue's counsel could not counter this submission. Consequently, the impugned notice was set aside, and the petition was allowed. No issue was expressly left undecided.

What were the facts?

The petitioner, Aashrit Capital 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 Assessment Year (AY) 2017-18. The petition also challenged the preceding notice under Section 148A(b) and the order passed under Section 148A(d). The petitioner argued that the issuance of the Section 148 notice was barred by limitation. The respondent was the Assistant Commissioner of Income Tax, Circle-111, Delhi. The procedural history involves the issuance of notices under Section 148A and subsequently under Section 148, which are now under challenge.

What were the issues?

1. Whether the notice dated 31.08.2024 issued under Section 148 of the Income Tax Act, 1961, for AY 2017-18 is barred by limitation, considering the provisions of the old regime regarding the time limit for issuance of such notices? Assessee's Contention: The petitioner argued that the issue is covered by the Delhi High Court's decision in Manju Somani v. Income Tax Officer Ward-70(1) & Ors and the Supreme Court's decision in Union of India & Others v. Rajeev Bansal. Specifically, they contended that for AY 2017-18, the period of six years from the end of the relevant assessment year expired on 31.03.2024. Since the impugned notice was issued thereafter, it is barred by limitation. They relied on the Supreme Court's interpretation of the proviso to Section 149(1)(b) of the old regime, which limits the retrospective operation of Section 149(1)(b) of the new regime. Revenue's Contention: The judgment records that the learned counsel for 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,Section 149(1)(b)

AI-generated summary — verify with the full judgment below

$~90 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 14663/2024 & CM APPL. 61548-49/2024 AASHRIT CAPITAL LIMITED .....Petitioner Through: Mr Gaurav Jain and Mr Shubham Gupta, Advocates. versus ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE -1 1 1, DELHI .....Respondent Through: Mr Indruj Singh Rai, SSC, Mr Sanjeev Menon and Mr Rahul Singh, JSCs and Mr Anmol Jagga, Advocate. CORAM: HON'BLE MR. JUSTICE VIBHU BAKHRU HON'BLE MS. JUSTICE TARA VITASTA GANJU O R D E R % 21.10.2024 1. The petitioner has filed the present petition, inter alia, impugning a notice dated 31.08.2024 (hereafter the impugned notice) issued under Section 148 of the Income Tax Act, 1961 (hereafter the Act) for the assessment year (AY) 2017-18. 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. 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 12:06:30

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 amounted to Rupees fifty lakhs or more. The proviso limits the retrospective operation of Section 149(1)(b) to protect the interests of the 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 12:06:30

assesses.” 5. In the present case, the period of six years for the AY 2017-18 expired on 31.03.2024. The impugned notice has been issued thereafter, and the same is thus barred by limitation. 6. The learned counsel for the respondent 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 TARA VITASTA GANJU, J OCTOBER 21, 2024 M 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 12:06:30

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