Style Solutions Private Limited Vs ACIT (Delhi High Court)
Summary: The Delhi High Court allowed Style Solutions Private Limited’s writ petition after reconsidering limitation pursuant to a Supreme Court remand. The dispute concerned a notice under Section 148 dated 31.08.2024 for Assessment Year 2016-17, together with the preceding notice under Section 148A(b) and order under Section 148A(d). A Division Bench had originally allowed the petition on 21.10.2024. In those proceedings, the petitioner relied on Manju Somani v. Income Tax Officer Ward-70(1) & Ors. and the Supreme Court’s decision in Union of India & Others v. Rajeev Bansal. The reproduced passages from Rajeev Bansal explained that the first proviso to Section 149(1)(b) protected earlier assessment years against reopening where the time limit under the old regime had expired. Applying that framework, the earlier Bench held that the six-year period for AY 2016-17 expired on 31.03.2023 and that the notice issued thereafter was barred by limitation.
The Income Tax Department challenged the earlier order before the Supreme Court. By an order dated 16.07.2026, the Supreme Court disposed of the Department’s SLP and remanded the matter for consideration of whether the proceedings were time-barred, referring to its orders in ITO v. Tej Partap Singh and ITO v. Sai Kumar Mateti. On reconsideration, the High Court held that its earlier view on limitation was correct, noting that the Revenue could cite no contrary law. Following its reasoning in the order dated 21.10.2024, the Court again allowed the writ petition and expressly quashed the order under Section 148A(d) and the Section 148 notice dated 31.08.2024 for AY 2016-17.
Cases Discussed
- ITO v. Sai Kumar Mateti — Civil Appeal No. 6922/2026, order dated 04.05.2026 (Supreme Court). Referred to in the Supreme Court’s order remanding the present matter for consideration of limitation.
- ITO v. Tej Partap Singh — Civil Appeal No. 4716/2026, order dated 10.04.2026 (Supreme Court). Also referred to in the Supreme Court’s remand order in the present proceedings.
- Union of India & Others v. Rajeev Bansal — 2024 SCC OnLine SC 2693 (Supreme Court). Paragraphs 46 and 49 were reproduced in the earlier High Court order to explain the protection against reopening after expiry of the old-regime limitation period.
- Manju Somani v. Income Tax Officer Ward-70(1) & Ors. — Neutral Citation: 2024:DHC:5411-DB (Delhi High Court). The petitioner cited this decision in the earlier proceedings as covering the limitation issue.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. On 21.10.2024, a Division Bench of this Court had allowed the present writ petition, while observing thus:-
“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 year2016-17.
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. Lalchandani, learned counsel appearing for the petitioner also refers 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.
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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 for the relevant assessment year 2016-17 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 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 application also stands disposed of”
2. The respondent-Income Tax Department preferred an SLP against the above order which came to be disposed of by Hon’ble the Supreme Court vide order dated 16.07.2026, while relying upon the orders dated 10.04.2026 and 04.05.2026 passed by Hon’ble the Supreme Court in ITO v. Tej Partap Singh (SC)/Civil Appeal no.4716/2026 and ITO v. Sai Kumar Mateti [2026] 187 (SC)/Civil Appeal no.6922/2026 respectively and the matter has been remanded to consider if the proceedings are time barred.
3. Having heard learned counsel for the parties and examining the issue on limitation, we are of the view that the above view taken by this Court on the issue of limitation is correct in the eye of law, as no contrary law could be cited by the Revenue.
4. Following the reasoning given by this Court in its above quoted order dated 21.10.2024, the present writ petition is allowed.
5. The order passed under Section 148A(d) of the Income Tax Act, 1961 so also the notice issued under Section 148 of the Income Tax Act, 1961 dated 31.08.2024 for Assessment Year 2016-17 are hereby quashed.
6. The writ petition is allowed.
