Sunil Bhalla Vs DCIT (Supreme Court of India)
Background and Reassessment Proceedings
The dispute arose from reassessment proceedings initiated against Sunil Bhalla under Sections 148A and 148 of the Income Tax Act, 1961. The Assessing Officer issued a show-cause notice under Section 148A(b) on 28.03.2024, granting time for reply up to 08.04.2024. The assessee sought an adjournment on 05.04.2024 and again sought adjournment on 15.04.2024. The latter request was declined. On 16.04.2024, the Assessing Officer passed the order under Section 148A(d) and simultaneously issued the consequential notice under Section 148. The assessee challenged these proceedings before the Delhi High Court, principally contending that the reassessment proceedings had become barred by limitation because the original statutory limitation expired on 31.03.2024 and even the initial period allowed for responding to the Section 148A(b) notice extended beyond that date.
Delhi High Court Proceedings and Reasoning
The Delhi High Court considered the petition along with the legal position examined in Shailendra Nath Rai v. Assistant Commissioner of Income Tax Circle 60(1) New Delhi & Anr.. The central issue concerned computation of limitation in light of the fifth and sixth provisos to Section 149. The High Court held that the time allowed to an assessee for responding to a notice under Section 148A(b), including the extended time granted for filing the reply, has to be excluded while computing limitation. It reasoned that accepting the contrary interpretation would make notices issued after 1 March potentially dependent upon the uncertain period taken by an assessee to respond and would frustrate the statutory opportunity of hearing provided under Section 148A.
Applying that principle to Sunil Bhalla’s case, the High Court noted that the Section 148A(b) notice was issued on 28.03.2024. After adjournments, the assessee’s further request made on 15.04.2024 was rejected and no reply had been filed. The Court therefore treated 15.04.2024 as the deemed date of filing of the reply for limitation purposes. From that date, the Assessing Officer had seven days under the sixth proviso to Section 149 to pass the Section 148A(d) order and issue the Section 148 notice. Accordingly, the permissible period extended up to 22.04.2024. Since both the Section 148A(d) order and Section 148 notice were issued on 16.04.2024, the High Court held them to be within limitation and dismissed the writ petition. The report of the Delhi High Court ruling is available here: Sunil Bhalla Vs DCIT (Delhi High Court).
Supreme Court Challenge
Sunil Bhalla carried the matter to the Supreme Court by Special Leave Petition. The Supreme Court record identifies the matter as Special Leave to Appeal (C) No. 31342 of 2026, and the order was passed on 08.09.2026. The challenge thus placed before the Supreme Court the Delhi High Court judgment sustaining the reassessment proceedings on the basis of the limitation computation under the fifth and sixth provisos to Section 149.
Supreme Court Ruling
The Supreme Court, after hearing learned counsel appearing for the petitioners and going through the materials on record, stated that it was not inclined to interfere with the impugned judgment(s) and order(s) passed by the High Court. It accordingly dismissed the Special Leave Petitions and disposed of all pending applications, if any. The Supreme Court did not set out any separate or additional reasoning on the interpretation of the fifth and sixth provisos to Section 149 and did not independently elaborate upon the computation of the limitation period adopted by the Delhi High Court.
Effect of Supreme Court Order on Delhi High Court Judgment
Consequently, the Delhi High Court judgment in Sunil Bhalla’s case remained undisturbed. The High Court had held, on the facts before it, that the period allowed or extended for responding to the Section 148A(b) notice had to be excluded for limitation purposes; where no reply was ultimately filed and the further adjournment request was rejected on 15.04.2024, that date was treated as the deemed date of reply. The Assessing Officer thereafter had seven days for the relevant Section 148A(d) order and Section 148 notice. Since both were issued on 16.04.2024, they were held to be within limitation. The Supreme Court’s dismissal of the SLP left that result intact without adding separate substantive reasoning of its own.
Read HC Judgment in this case: Sunil Bhalla Vs DCIT (Delhi High Court)
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
1. Having heard the learned counsel appearing for the petitioners and having gone through the materials on record, we are not inclined to interfere with the impugned judgment(s) and order(s) passed by the High Court.
2. The Special Leave Petitions are, accordingly, dismissed.
3. Pending application(s), if any, shall stand disposed of.
