Mohd. Athar Anjum Vs ACIT (Delhi High Court)
Summary: The Delhi High Court, in Mohd Athar Anjum Vs Assistant Commissioner of Income Tax Central Circle 28, Delhi, quashed a reassessment notice dated 31 March 2024 issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2014-15, holding that it was barred by limitation. The petitioner had approached the High Court through W.P.(C) 3472/2025, challenging not only the reassessment notice but also the preceding notice under Section 148A(b) and the order passed under Section 148A(d). The principal controversy was whether reassessment proceedings could be initiated after expiry of the six-year limitation period prescribed under the earlier reassessment regime.
The petitioner submitted that the controversy was covered by the Delhi High Court’s decision in Manju Somani v. Income Tax Officer Ward-70(1) & Ors., Neutral Citation 2024:DHC:5411-DB. Reliance was also placed on the Supreme Court’s judgment in Union of India & Others v. Rajeev Bansal, 2024 SCC OnLine SC 2693. The petitioner drew attention to paragraphs 46 and 49 of that judgment, which explained the operation of the first proviso to Section 149(1)(b). The Supreme Court had clarified that, for assessment years governed by the transitional protection, a notice under the new reassessment regime could not be issued if the six-year limitation period under the earlier law had already expired. The enlarged ten-year limitation period introduced under the new regime could not revive an assessment year that had become time-barred under the earlier provisions.
Applying that principle, the High Court observed that the six-year period from the end of AY 2014-15 expired on 31 March 2021. Since the impugned notice under Section 148 was issued on 31 March 2024, it was beyond the permissible limitation period. The Court accordingly held that the notice was barred by limitation. Significantly, counsel appearing for the Revenue concurred with this legal position. The Court therefore did not undertake any separate examination of alleged escaped income or the merits of the proposed reassessment.
Cases Discussed
- Manju Somani v. Income Tax Officer Ward-70(1) & Ors. (Delhi High Court), Neutral Citation: 2024:DHC:5411-DB — Relied upon by the petitioner as covering the limitation issue.
- Union of India & Others v. Rajeev Bansal (Supreme Court), 2024 SCC OnLine SC 2693 — Paragraphs 46 and 49 were relied upon regarding the first proviso to Section 149(1)(b) and the prohibition against reviving reassessment proceedings already barred under the earlier limitation provisions.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. The petitioner has filed the present petition, inter alia, impugning a notice dated 31.03.2024 [the impugned notice] issued under Section 148 of the Income Tax Act, 1961 [the Act] for the Assessment Year [AY] 2014-15.
2. The petitioner also impugns the notice issued under Section 148A(b) of the Act, and the order passed under Section 148A(d) of the Act prior to the issuance of the impugned notice.
3. The learned counsel appearing for the petitioner submits that the issue stands covered by the decision of this court in Manju Somani v. Income Tax Officer Ward-70(1) & Ors: Neutral Citation: 2024:DHC:5411-DB.
4. The learned counsel for the petitioner also referred to the decision of the Supreme Court in Union of India & Others v. Rajeev Bansal : 2024 SCC OnLine SC 2693 and drew the attention of this court to the following passages from the said judgment:
“46. The ingredients of the proviso could be broken down for analysis as follows: (i) no notice under Section 148 of the new regime can be issued at any time for an assessment year beginning on or before 1 April 2021; (ii) if it is barred at the time when the notice is sought to be issued because of the “time limits specified under the provisions of” 149(1)(b) of the old regime. Thus, a notice could be issued under Section 148 of the new regime for assessment year 2021-2022 and before only if the time limit for issuance of such notice continued to exist under Section 149(1)(b) of the old regime.
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49. The first proviso to Section 149(1)(b) requires the determination of whether the time limit prescribed under Section 149(1)(b) of the old regime continues to exist for the assessment year 2021-2022 and before. Resultantly, a notice under Section 148 of the new regime cannot be issued if the period of six years from the end of the relevant assessment year has expired at the time of issuance of the notice. This also ensures that the new time limit of ten years prescribed under Section 149(1)(b) of the new regime applies prospectively. For example, for the assessment year 2012-2013, the ten year period would have expired on 31 March 2023, while the six year period expired on 31 March 2019. Without the proviso to Section 149(1)(b) of the new regime, the Revenue could have had the power to reopen assessments for the year 2012-2013 if the escaped assessment amounted to Rupees fifty lakhs or more. The proviso limits the retrospective operation of Section 149(1)(b) to protect the interests of the assesses.”
5. In the present case, the period of six years from the end of the relevant assessment year 2014-15 expired on 31.03.2021. The impugned notice has been issued thereafter, and the same is thus barred by limitation.
6. The learned counsel for the respondent concurs with the aforesaid view.
7. In view of the above, the impugned notice is set aside.
8. The petition is allowed in the aforesaid terms. Pending application also stands disposed of.
