Case Law Details
Dinesh Jindal Vs ACIT (Delhi High Court)
In the case of Dinesh Jindal vs. ACIT (Delhi High Court), the central issue revolves around the validity of reassessment proceedings initiated under Section 148 of the Income Tax Act, 1961 (the Act) for Assessment Year (AY) 2013-14. The initiation of reassessment was triggered by a search conducted on 9th February 2022 at M/s Proform Interiors Private Limited. The petitioner challenged this reassessment action primarily on grounds related to the applicability of limitation periods and procedural requirements under Sections 149, 153A, and 153C of the Act.
The petition argued that the reassessment notice issued on 30th March 2023 under Section 148 was beyond the permissible time limits prescribed under Section 149(1)(b), which allows for reopening assessments if the income escaping assessment is fifty lakh rupees or more and not more than ten years have elapsed from the end of the relevant AY. However, the respondents contended that since the search was conducted after 1st April 2021, the reassessment action was governed solely by Section 148, not Section 153C, and thus fell within the prescribed time limits.
The court’s analysis focused on interpreting the First Proviso to Section 149(1), which exempts the application of Section 148 in cases where a notice under Section 148, 153-A, or 153-C could not have been issued due to time limits prior to 1st April 2021. The petitioner argued that despite the search occurring after this date, the reassessment should still adhere to the timeframes set by the previous provisions of Section 149(1)(b) and Section 153C, which included a more favorable interpretation regarding the computation of the relevant assessment years.
The court referred to its earlier decisions, notably in cases like Filatex India Ltd. vs. Deputy Commissioner of Income Tax, where it had interpreted similar provisions to conclude that reassessment notices issued beyond the stipulated time frames were invalid. It highlighted that the computation of the relevant assessment year should be determined not from the date of the search itself but from the date when the material from the search was handed over to the Assessing Officer (AO) of the non-searched person, as per the First Proviso to Section 153C.
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