Facts of the Case

The petitioner, AKC Retailers Private Limited, filed a writ petition challenging notice dated 27.05.2022 issued under Section 148A(b) of the Income-tax Act, 1961, the order dated 22.07.2022 passed under Section 148A(d), and the consequential notice under Section 148 initiating reassessment proceedings for Assessment Year 2013–14. The petitioner contended that the reassessment notice issued on 22.07.2022 was barred by limitation as the six-year period under Section 149 expired on 17.06.2022, even after considering extensions under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 and the Supreme Court judgment in Ashish Agarwal.

Issues Involved

Whether the reassessment notice issued under Section 148 for Assessment Year 2013–14 was barred by limitation, whether the surviving period of limitation was correctly computed after applying TOLA and judicial precedents, and whether the reassessment proceedings could survive in light of the Supreme Court judgment in Union of India vs. Rajeev Bansal and the Delhi High Court decision in Kanwaljeet Kaur.

Petitioner’s Arguments

The petitioner argued that the reassessment notice dated 22.07.2022 was issued beyond the permissible limitation period. It was submitted that the original six-year limitation expired on 31.03.2020, which stood extended up to 30.06.2021 under TOLA. From the date of issuance of the original notice under the old regime on 24.06.2021, only six days of limitation survived, extended to seven days by proviso to Section 149. After excluding the deemed stay period from 24.06.2021 to 10.06.2022, the last permissible date for issuing notice under Section 148 was 17.06.2022. Reliance was placed on the Delhi High Court judgment in Kanwaljeet Kaur v. Commissioner of Income Tax, 2025 SCC OnLine Del 605.

Respondent’s Arguments

The Revenue submitted that the issue of limitation required factual examination by the Assessing Officer in light of evolving jurisprudence and the Supreme Court decision in Union of India v. Rajeev Bansal, 2024 SCC OnLine SC 2693. It was contended that reassessment proceedings should not be quashed at the threshold without such examination.

Court Order / Findings

The Delhi High Court observed that the issue raised by the petitioner regarding limitation of reassessment notices for AY 2013–14 required examination by the Assessing Officer in accordance with the law laid down by the Supreme Court in Union of India v. Rajeev Bansal and the Delhi High Court in Ram Balram Buildhome Pvt. Ltd. v. Income Tax Officer. The Court reproduced paragraphs 27 to 29 of the judgment in Kanwaljeet Kaur, which directed Assessing Officers to individually evaluate each reassessment notice under Section 148 by computing the surviving period of limitation and to pass a reasoned and speaking order on whether such notice survives or is liable to be recalled. The Court held that a similar exercise was warranted in the petitioner’s case.

Important Clarification

The Court clarified that reassessment notices issued during the transition from the old to the new reassessment regime must be tested individually on the anvil of limitation, keeping in view the judgments in Rajeev Bansal, Ram Balram Buildhome, and Kanwaljeet Kaur. The Assessing Officer is required to pass a reasoned and speaking order addressing the limitation issue, and any adverse order may be challenged by the assessee in accordance with law.

Final Outcome

The writ petition was disposed of. The Assessing Officer was directed to examine the reassessment proceedings afresh by applying the principles laid down in Union of India v. Rajeev Bansal and Kanwaljeet Kaur and to pass a reasoned and speaking order on whether the reassessment notice for Assessment Year 2013–14 survives or is liable to be recalled.

Link to download the order - https://www.mytaxexpert.co.in/uploads/1769502863_AKCRETAILERSPRIVATELIMITEDVsINCOMETAXOFFICERANR..pdf

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