Delhi HC Drops IBIBO Group’s Income Tax Reassessment

IBIBO Group Private Limited Vs ACIT (Delhi High Court)

Delhi High Court ruled in favor of IBIBO Group Private Limited by quashing the income tax reassessment proceedings for the Assessment Year (AY) 2015-16. The proceedings in question had been initiated under Section 148 of the Income Tax Act, 1961, following a notice issued on 23rd July 2022. IBIBO Group filed a writ petition challenging the reassessment action and the associated notice. The petition primarily contested the validity of the reassessment, and the court considered a significant legal concession made by the revenue before the Supreme Court in the case of Union of India vs. Rajeev Bansal.

This concession indicated that for notices issued between April 1, 2021, and June 30, 2021, concerning the assessment years 2013-2014 to 2017-2018, reassessment notices would be governed by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA). The provisions of TOLA, in particular, affect the timelines for the issuance of such notices. For AY 2015-16, the court acknowledged the revenue’s concession that any reassessment notice issued after April 1, 2021, would be invalid, as it fell outside the prescribed time limit under the TOLA. As a result, the court concluded that the reassessment proceedings for AY 2015-16 could not stand.

Consequently, the Delhi High Court allowed the writ petition and quashed both the impugned order under Section 148A(d) and the consequential notice under Section 148 issued for the assessment year in question. This ruling provided relief to IBIBO Group by ensuring that the reassessment action would not proceed further.

FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT

1. The instant writ petition assails the reassessment action initiated under Section 148 of the Income Tax Act, 1961 [“Act”] for Assessment Year [“AY”] 2015-2016. The petitioner has impugned the order referable to Section 148A(d) of the Act dated 23 July 2022 and the consequential notice under Section 148 of the Act which came to be issued on the same date.

2. We bear in mind the following concession which came to be recorded on behalf of the respondent before the Supreme Court in Union of India and Others vs. Rajeev Bansal [2024 SCC OnLine SC 2693] and relevant parts whereof are reproduced hereinbelow:-

“(e) The Finance Act, 2021 ((2021) 432 ITR (Stat) 52) substituted the old regime for reassessment with a new regime. The first proviso to section 149 does not expressly bar the application of Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. Section 3 of the Taxation And Other Laws (Relaxation And Amendment Of Certain Provisions) Bill, 2020  applies to the entire Income-tax Act, including sections 149 and 151 of the new regime. Once the first proviso to section 149(1)(b) is read with Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, then all the notices issued between April 1, 2021 and June 30, 2021 pertaining to the assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017, and 2017-2018 will be within the period of limitation as explained in the tabulation below:

(f) The Revenue concedes that for the assessment year 2015-2016, all notices issued on or after April 1, 2021 will have to be dropped as they will not fall for completion during the period prescribed under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020.”

3. In view of the aforesaid, it is evident that the impugned reassessment action for AY 2015-16 would not sustain.

4. The writ petition is accordingly allowed. The impugned order under Section 148A(d) of the Act dated 23 July 2022 and consequential notice referable to Section 148 of even date are hereby quashed and set aside.