Manju Somani Vs ITO (Delhi High Court)
Delhi High Court held that that no notice under section 148 of the Income Tax Act shall be issued if four years “but not more than six years” have elapsed from the end of the relevant assessment year.
Facts- The principal challenge is to the initiation of reassessment pursuant a notice dated 29 April 2024 issued u/s. 148 of the Income Tax Act, 1961 and pertaining to Assessment Year 2016-17. The reassessment action represents the third foray of the writ petitioner consequent to an earlier action coming to be annulled. The petitioners contend that bearing in mind the Proviso to Section 149(1), the reassessment action would not sustain.
Conclusion- Undisputedly, Section 149(1)(b) as it stood prior to the introduction of the amendments by way of Finance Act, 2021 prescribed that no notice under Section 148 shall be issued if four years “but not more than six years” have elapsed from the end of the relevant assessment year. Thus the period of six years stood erected as the terminal point which when crossed would have rendered the initiation of reassessment impermissible in law.
Held the impugned notice when tested on the anvil of the pre-amendment Section 149(1)(b) in order to be sustained would have to meet the prescription of six years. Undisputedly that period in respect of AY 2016-17 came to an end on 31 March 2023. We thus find ourselves unable to sustain the impugned action of reassessment and which was commenced pursuant to the notice dated 29 April 2024.
