Kalpana Buildmart Private Limited Vs ITO (Delhi High Court)
The writ petition before the Delhi High Court challenged a notice dated 30.08.2024 issued under Section 148 of the Income Tax Act, 1961 for Assessment Year (AY) 2014–15. The petitioner also impugned the prior notice issued under Section 148A(b) and the order passed under Section 148A(d) of the Act, contending that the initiation of reassessment proceedings was barred by limitation.
Read SC Judgment in this case: Reassessment Notices Beyond Six-Year Limitation Invalid: SC Upholds Delhi HC Order
The petitioner’s counsel submitted that the issue was squarely covered by a prior decision of the same Court and relied upon the judgment of the Supreme Court in Union of India & Others v. Rajeev Bansal. Reliance was placed on the interpretation of the proviso to Section 149(1)(b) of the Act, as explained by the Supreme Court, to demonstrate that reassessment notices under the new regime could not be issued for assessment years prior to AY 2021–22 if the limitation period under the old regime had already expired.
The Supreme Court judgment, as referred to, clarified that no notice under Section 148 of the new regime can be issued for assessment years beginning on or before 1 April 2021 if such notice was already barred by limitation under the time limits prescribed in Section 149(1)(b) of the old regime. The Court further explained that the proviso to Section 149(1)(b) ensures that the extended ten-year time limit introduced under the new regime operates only prospectively. As a result, if the six-year limitation period under the old regime had expired at the time of issuance of the notice, reassessment proceedings could not be initiated under the new regime, even if the alleged escaped income exceeded the monetary threshold.
