Facts of the Case

The petitioner, Nimit Builders Private Limited, successor in interest of JK Jeet Clothes Private Limited and Verma Proptech Private Limited, filed a writ petition challenging the notice dated 18.05.2022 issued under Section 148A(b) of the Income-tax Act, 1961, the order dated 28.07.2022 passed under Section 148A(d), and the consequential notice dated 28.07.2022 issued under Section 148 for Assessment Year 2015–16.

The petitioner contended that the impugned reassessment proceedings were initiated after 01.04.2021 and were barred by limitation in terms of Section 149 as amended by the Finance Act, 2021. Reliance was placed on the Supreme Court’s judgment in Union of India vs. Rajeev Bansal and the Delhi High Court’s decisions in Makemytrip India Private Limited and Mectech Knitfabs Pvt. Ltd.

Issues Involved

Whether reassessment proceedings initiated for Assessment Year 2015–16 by notices issued after 01.04.2021 are barred by limitation under the amended provisions of Section 149 read with the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, and whether the impugned notices and orders are liable to be quashed.

Petitioner’s Arguments

The petitioner submitted that the issue was no longer res integra in view of the authoritative pronouncement of the Supreme Court in Rajeev Bansal, wherein the Revenue had conceded that for Assessment Year 2015–16, all notices issued on or after 01.04.2021 were required to be dropped as they would not fall for completion within the period prescribed under TOLA.

It was further argued that the Delhi High Court had consistently followed the said principle in Makemytrip India Private Limited, Mectech Knitfabs Pvt. Ltd., Viable Management Consultants Pvt. Ltd., and other identical matters, and therefore the impugned reassessment proceedings deserved to be set aside.

Respondents’ Arguments

The Revenue, through its counsel, did not contest the applicability of the judgment of the Supreme Court in Rajeev Bansal or the Delhi High Court decisions in Makemytrip India Private Limited and Mectech Knitfabs Pvt. Ltd. It was fairly conceded that the controversy stood covered in favour of the petitioner.

Court Order / Findings

The Delhi High Court noted that the issue raised by the petitioner was squarely covered by the judgment of the Supreme Court in Union of India vs. Rajeev Bansal, as followed by the Delhi High Court in Makemytrip India Private Limited and Mectech Knitfabs Pvt. Ltd.

In view of the undisputed legal position and the concession made by the Revenue, the Court held that the impugned notice issued under Section 148 and the order passed under Section 148A(d), both dated 28.07.2022, could not be sustained for Assessment Year 2015–16. The Court accordingly set aside the impugned notice and order, along with all consequential proceedings.

Important Clarification

The Court clarified that for Assessment Year 2015–16, all reassessment notices issued on or after 01.04.2021 are barred by limitation under the amended reassessment regime, as conceded by the Revenue before the Supreme Court in Rajeev Bansal, and such proceedings are liable to be quashed without further adjudication on merits.

Final Outcome

The writ petition was allowed. The Delhi High Court set aside the notice dated 28.07.2022 issued under Section 148 and the order dated 28.07.2022 passed under Section 148A(d) of the Income-tax Act for Assessment Year 2015–16, along with all proceedings initiated pursuant thereto. Pending applications were disposed of as infructuous.

Link to download order - https://www.mytaxexpert.co.in/uploads/1769678382_NIMITBUILDERSPRIVATELIMITEDVsASSISTANTCOMMISSIONEROFINCOMETAXORS..pdf

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