Facts of the Case

The petitioner challenged the initial notice dated 17.06.2021 issued under Section 148 of the Income-tax Act, 1961 under the old regime, the subsequent notice dated 28.05.2022 issued under Section 148A(b), the order dated 28.07.2022 passed under Section 148A(d), and the consequential notice dated 28.07.2022 issued under Section 148 under the amended regime, all pertaining to Assessment Year 2013–14.

The petitioner contended that the entire reassessment proceedings were time-barred under the first proviso to Section 149(1) and contrary to the law laid down by the Supreme Court in Union of India vs. Ashish Agarwal and subsequently clarified in Union of India vs. Rajeev Bansal. Reliance was also placed on the Delhi High Court decision in Ram Balram Buildhome Pvt. Ltd. and other coordinate bench decisions applying the same principles.

Issues Involved

Whether the reassessment proceedings initiated for Assessment Year 2013–14 survive in view of the limitation prescribed under the amended reassessment regime, and whether the notices issued after transition from the old to the new law are barred by limitation in terms of the Supreme Court’s judgments.

Petitioner’s Arguments

The petitioner argued that applying the computation of the surviving period as illustrated by the Supreme Court in Rajeev Bansal, the reassessment proceedings had become time-barred. It was submitted that the notices issued after 01.04.2021 could not be sustained for AY 2013–14 and that identical matters had been quashed by the Delhi High Court following Ram Balram Buildhome Pvt. Ltd.

A detailed chart of relevant dates was placed before the Court to demonstrate that, even after giving credit for the balance period available under the old regime, the impugned proceedings did not survive.

Respondent’s Arguments

The Revenue submitted that in view of the decision of the Delhi High Court in Kawaljeet Kaur vs. Assistant Commissioner of Income Tax and connected matters, it would be appropriate for the Assessing Officer to examine the issue of the surviving period on a case-by-case basis. It was argued that instead of the Court undertaking factual computation, the matter should be remanded to the Assessing Officer to pass a reasoned and speaking order after considering the binding precedents.

Court Order / Findings

The Delhi High Court noted that similar matters had been disposed of by remanding the issue to the Assessing Officer to determine the surviving period in light of the judgments of the Supreme Court in Rajeev Bansal and of the Delhi High Court in Ram Balram Buildhome Pvt. Ltd., TKS Builders, Abhinav Jindal and Naveen Kumar Gupta.

The Court recorded the consent of the petitioner to such a course of action and held that it would be appropriate to remit the matter to the Assessing Officer to examine whether the reassessment notices survived the limitation prescribed under Section 149 after transition to the amended regime.

Important Clarification

The Court clarified that the Assessing Officer must pass a reasoned and speaking order after granting an opportunity of hearing to the petitioner, specifically dealing with the computation of the surviving period in accordance with binding judicial precedents.

Final Outcome

The writ petition was disposed of. The Delhi High Court remanded the matter to the Assessing Officer to decide the issue of surviving period of limitation for Assessment Year 2013–14 by considering the judgments of the Supreme Court in Ashish Agarwal and Rajeev Bansal and the Delhi High Court in Ram Balram Buildhome Pvt. Ltd. and allied cases. The Assessing Officer was directed to complete the exercise within eight weeks after granting an opportunity of hearing to the petitioner. Pending applications were disposed of accordingly.

Link to download order- https://www.mytaxexpert.co.in/uploads/1769682059_MAHENDRAKUMARJHANWARVsINCOMETAXOFFICERWARD361NEWDELHI.pdf

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