Facts of the Case

The petitioner, Ameeta Goyal, filed a writ petition challenging the continuation of reassessment proceedings for Assessment Year 2013–14 initiated pursuant to notice dated 20.03.2019 issued under Section 148 of the Income-tax Act, 1961. The petitioner had originally filed her return on 27.07.2013.

Subsequently, the petitioner approached the Income Tax Settlement Commission for multiple assessment years. While settlement applications for certain years were accepted, applications for AYs 2012–13 and 2013–14 were rejected. The rejection was challenged before the Delhi High Court, during which period reassessment proceedings were stayed by an interim order dated 20.12.2019.

After dismissal of the settlement-related writ petition on 13.12.2023, the interim stay stood vacated. However, the Assessing Officer did not conclude the reassessment within the statutory time and continued issuing notices under Section 142(1), prompting the present writ petition.

Issues Involved

Whether the reassessment proceedings for Assessment Year 2013–14 initiated pursuant to notice under Section 148 dated 20.03.2019 were barred by limitation under Section 153(2), whether Section 153(6) was applicable, and how the exclusion of time during which proceedings were stayed by court was to be computed.

Petitioner’s Arguments

The petitioner contended that the time limit for completing reassessment had expired. It was argued that Section 153(6) had no application as there was no finding or

direction by any court requiring the Assessing Officer to complete the assessment. The petitioner submitted that after vacating of the interim stay on 13.12.2023, the Assessing Officer had only sixty days available to conclude the proceedings under the proviso to Explanation 1 to Section 153, which expired on 11.02.2024.

Respondents’ Arguments

The Revenue argued that the reassessment proceedings were saved by Section 153(6) of the Act and that the limitation period stood extended. It was contended that the assessment could still be completed as the earlier proceedings were stayed by the Court.

Court Order / Findings

The Delhi High Court held that Section 153(6) was wholly inapplicable as no finding or direction had been issued by the Court requiring completion of assessment. The Court observed that withdrawal of the earlier writ petition did not amount to any direction under Section 153(6).

The Court further held that in terms of Explanation 1 to Section 153, the period during which proceedings were stayed stood excluded. Since the reassessment proceedings were otherwise required to be completed by 31.12.2019 and the stay was granted on 20.12.2019, the remaining period was less than sixty days. Accordingly, the proviso to Explanation 1 applied, granting the Assessing Officer sixty days from the date the stay was vacated.

As the stay stood vacated on 13.12.2023, the Court held that the extended period expired on 11.02.2024. Any proceedings thereafter were barred by limitation. The continued issuance of notices under Section 142(1) beyond this date was therefore without jurisdiction.

Important Clarification

The Court clarified that Section 153(6) applies only where an assessment is required to be made in consequence of or to give effect to a finding or direction of a court or authority. Mere withdrawal or dismissal of a writ petition, without any substantive finding or direction, does not trigger Section 153(6). The limitation provisions under Section 153 must be strictly construed.

Final Outcome

The writ petition was allowed. The Delhi High Court held that the reassessment proceedings for Assessment Year 2013–14 pursuant to notice dated 20.03.2019 were barred by limitation and directed that the reassessment proceedings be terminated. Liberty was granted to the petitioner to seek refund of taxes paid in accordance with law. Pending applications were disposed of accordingly.

Link to download order - https://www.mytaxexpert.co.in/uploads/1769685970_AMEETAGOYALVsTHEASSESSMENTUNITOFINCOMETAXORS..pdf

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