Pankaj Jain Vs ACIT (Delhi High Court)
The Delhi High Court considered a writ petition challenging a notice issued under Section 148 of the Income-tax Act, 1961 for Assessment Year (AY) 2015–16. The petitioner confined the challenge to the ground of limitation, contending that the reassessment notice was time-barred. The Court noted that where reassessment proceedings arise from a search conducted on or after 01.04.2021, the action must satisfy the limitation framework under Sections 149, 153A and 153C as they existed prior to the Finance Act, 2021, by virtue of the first proviso to Section 149(1).
The Court reiterated that, in the case of a non-searched person, the computation of limitation under Section 153C hinges on the date when the Assessing Officer (AO) of the searched person records satisfaction and hands over material to the AO of the other person. In the present case, there was no material on record to show that any satisfaction note had been recorded by the AO of the searched person or that seized material had been handed over. Consequently, the date of issuance of the Section 148 notice had to be considered for computing limitation.
Relying on its earlier decisions, the Court held that AY 2015–16 fell beyond the permissible ten-year block even on the most liberal computation under the first proviso to Section 149(1). The satisfaction note prepared by the AO having jurisdiction over the petitioner could not substitute the statutory requirement of a satisfaction note by the AO of the searched person. Even if approval dates were considered, the reassessment was still beyond limitation. The Revenue accepted this position. Accordingly, the Court allowed the petition and set aside the impugned notice and all proceedings pursuant thereto.
