Facts of the Case

The petitioner, MakeMyTrip India Private Limited, filed a writ petition challenging the notice dated 19.05.2022 issued under Section 148A(b) of the Income-tax Act, 1961, the order dated 27.07.2022 passed under Section 148A(d), and the consequential notice dated 27.07.2022 issued under Section 148 for Assessment Year 2015–16.

The petitioner had originally filed its return of income for AY 2015–16 on 28.11.2015. Subsequently, pursuant to entering into an Advance Pricing Agreement on 25.10.2017, the return was modified and selected for scrutiny. The assessment proceedings culminated in an assessment order dated 29.12.2018 passed under Section 143(3), assessing income at ₹1,90,02,11,840.

The additions were set aside by the Commissioner of Income Tax (Appeals) by order dated 24.06.2019. Thereafter, the Assessing Officer issued a notice dated 21.04.2021 under Section 148 under the old reassessment regime, which later stood governed by the directions of the Supreme Court in Union of India vs. Ashish Agarwal.

Issues Involved

Whether the reassessment notice issued under Section 148 for Assessment Year 2015–16 on 27.07.2022 was barred by limitation under Section 149, and whether the provisions of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 were applicable to extend limitation.

 

Petitioner’s Arguments

The petitioner contended that the reassessment notice was issued beyond the period of limitation prescribed under Section 149(1) of the Act. It was argued that in view of the authoritative pronouncement of the Supreme Court in Union of India vs. Rajeev Bansal, the Revenue had expressly conceded that TOLA was not applicable for reopening assessments for AY 2015–16.

The petitioner relied upon the Delhi High Court decision in Ibibo Group Private Limited and similar orders passed by various High Courts and the Supreme Court dismissing SLPs, holding that all notices issued on or after 01.04.2021 for AY 2015–16 were liable to be dropped.

Respondents’ Arguments

The Revenue sought to justify the reassessment proceedings by placing reliance on the directions issued by the Supreme Court in Union of India vs. Ashish Agarwal, contending that the notice under Section 148A(b) and subsequent proceedings were in conformity with law.

Court Order / Findings

The Delhi High Court examined the concession recorded by the Supreme Court in Union of India vs. Rajeev Bansal, wherein it was categorically stated that TOLA was not applicable to Assessment Year 2015–16 and that all notices issued on or after 01.04.2021 for that year were required to be dropped.

The Court noted that the impugned notice under Section 148 was issued on 27.07.2022, which was admittedly beyond the permissible limitation period under Section 149(1). The Court further observed that similar notices had consistently been set aside by the High Courts and that the Supreme Court had dismissed Special Leave Petitions arising from such decisions.

In view of the settled legal position, the Court held that the impugned notice and all proceedings emanating therefrom were barred by limitation and unsustainable in law.

Important Clarification

The Court clarified that for Assessment Year 2015–16, the benefit of TOLA is unavailable, as expressly conceded by the Revenue before the Supreme Court in Rajeev Bansal. Consequently, reassessment notices issued on or after 01.04.2021 for that assessment year are liable to be quashed as time-barred, irrespective of the procedural framework evolved in Ashish Agarwal.

Final Outcome

The writ petition was allowed. The Delhi High Court set aside the notice dated 19.05.2022 issued under Section 148A(b), the order dated 27.07.2022 passed under Section 148A(d), and the notice dated 27.07.2022 issued under Section 148 for Assessment Year 2015–16, along with all proceedings emanating therefrom, holding the reassessment proceedings to be barred by limitation.

Link to download order - https://www.mytaxexpert.co.in/uploads/1769686428_MAKEMYTRIPINDIAPRIVATELIMITEDVsDEPUTYCOMMISSIONEROFINCOMETAXCIRCLE161DELHIANR..pdf

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