Sheetal International Private Limited Vs Chief Commissioner of Income Tax (Delhi High Court)
In the case of Sheetal International Private Limited Vs Chief Commissioner of Income Tax, the Delhi High Court addressed the validity of a notice issued under Section 148 of the Income Tax Act, 1961, for the assessment year (AY) 2017-18. The petitioner contested the notice dated 01.05.2024 and the accompanying order under Section 148A(d) on the grounds that it was issued beyond the time limits specified in the first proviso to Section 149(1). The court considered the petitioner’s reliance on its earlier judgment in Manju Somani v. Income Tax Officer and a Supreme Court decision in Union of India v. Rajeev Bansal, which clarified the retrospective and prospective application of amended provisions in Section 149.
Read SC Judgment: SC Refuses to Entertain Time-Barred Tax Reopening Dispute Due to Filing Delay
The court observed that under the amended regime, notices for reopening assessments cannot be issued for AYs prior to 2021-22 if the limitation period under the previous Section 149(1)(b) regime had already expired. Specifically, for AY 2017-18, the six-year limitation period ended on 31 March 2024, rendering the notice time-barred. Consequently, the court set aside the impugned order and notice, providing relief to the petitioner. This judgment reiterates the legal safeguards against retrospective application of time limits in reassessment proceedings, ensuring taxpayers are protected from arbitrary reopenings of closed assessments.
