Facts of the Case

The petitioner, Anju Khosla, challenged a notice dated 26.08.2024 issued under Section 148A(b) of the Income-tax Act for Assessment Year 2015–16, the order dated 31.08.2024 passed under Section 148A(d), and the consequential notice dated 31.08.2024 issued under Section 148 along with all proceedings emanating therefrom. The petitioner contended that reassessment proceedings for AY 2015–16 were initiated under the unamended regime and that the limitation period for issuance of notice under Section 148 had already expired. The writ petition was filed seeking quashing of the impugned notices and proceedings on the ground of limitation.

Issues Involved

Whether reassessment proceedings initiated for Assessment Year 2015–16 after 01.04.2021 were barred by limitation, whether the provisions of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 were applicable to such reassessment, and whether notices issued under Sections 148A and 148 were sustainable in law.

Petitioner’s Arguments

The petitioner argued that reassessment for AY 2015–16 was governed by the unamended provisions of the Income-tax Act and that the statutory limitation for issuance of notice under Section 148 had expired. It was submitted that TOLA was inapplicable to AY 2015–16, as conceded by the Revenue before the Supreme Court in Union of India vs Rajeev Bansal. Accordingly, the impugned notices and proceedings were liable to be set aside as time-barred.

Respondent’s Arguments

The Revenue did not dispute the legal position canvassed by the petitioner and was unable to show anything contrary to the submissions that reassessment for AY 2015–16 was barred by limitation in view of settled law.

 

 Court Order / Findings

The Delhi High Court held that the issue was squarely covered by the decision of a Coordinate Bench in Makemytrip India Private Limited vs Deputy Commissioner of Income Tax, wherein reassessment notices issued for AY 2015–16 beyond the prescribed limitation were set aside. The Court relied on the Supreme Court decision in Union of India vs Rajeev Bansal, wherein the Revenue conceded that TOLA was not applicable for reopening assessments for AY 2015–16. The Court further noted that similar reassessment notices had been quashed in Ibibo Group Private Limited and other cases. Applying the same principles, the Court held that the impugned notices and proceedings were barred by limitation and unsustainable in law.

Important Clarification

The Court clarified that for Assessment Year 2015–16, any notice issued under Section 148 on or after 01.04.2021 is liable to be dropped as TOLA does not extend limitation for such year, and reassessment proceedings cannot be sustained beyond the period prescribed under Section 149.

Final Outcome

The writ petition was allowed. The notice issued under Section 148 of the Income-tax Act and the order passed under Section 148A(d) dated 31.08.2024, along with all consequential proceedings, were set aside. The pending application was disposed of as infructuous.

Link to Download order- https://mytaxexpert.co.in/uploads/1769502768_ANJUKHOSLAVsINCOMETAXOFFICERWARD151DELHIANR.pdf

 

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