Sanjay Bansal Vs ITO (Delhi High Court)
The Delhi High Court has set aside a reassessment notice issued under Section 148 of the Income Tax Act, 1961, to Sanjay Bansal for the Assessment Year (AY) 2016-17, ruling it to be time-barred. The notice, dated April 15, 2024, was issued following an order under Section 148A(d) of the Act.
The court’s decision aligns with its earlier ruling in Manju Somani v. Income Tax Officer Ward-70(1) & Ors (2024:DHC:5411-DB), which addressed similar issues of limitation periods for reassessment notices.
A significant precedent cited by the court was the Supreme Court’s observation in Union of India & Others v. Rajeev Bansal (2024 SCC OnLine SC 2693). The Supreme Court clarified the application of the first proviso to Section 149(1)(b) of the Act. This proviso stipulates that no notice under the new Section 148 regime can be issued for an assessment year beginning on or before April 1, 2021, if it was already barred by the time limits specified under the old Section 149(1)(b).
Under the pre-amendment provisions, a Section 148 notice could be issued for a maximum period of six years from the end of the relevant assessment year. For AY 2016-17, the six-year period would have expired on March 31, 2023. Therefore, the notice issued on April 15, 2024, was deemed to be beyond the permissible timeframe. The Supreme Court in Rajeev Bansal emphasized that this proviso prevents the retrospective application of the new ten-year limitation period, thereby protecting assesses’ interests for older assessment years.
