Facts of the Case

The petitioner, Gopal Bansal, challenged the order dated 31.08.2024 passed under Section 148A(d) of the Income-tax Act, 1961 and the consequential notice issued under Section 148 of the Act for Assessment Year 2015–16. The reassessment proceedings were initiated after 01.04.2021. The petitioner contended that the notices were barred by limitation in terms of the first proviso to Section 149 of the Act, which mandates application of the pre-amendment limitation period for assessment years prior to 01.04.2021.

Issues Involved

Whether reassessment proceedings initiated for Assessment Year 2015–16 after 01.04.2021 were barred by limitation under the first proviso to Section 149 of the Income-tax Act, whether the Assessing Officer was justified in proceeding despite binding precedent of the Delhi High Court, and whether the impugned notices were without jurisdiction.

Petitioner’s Arguments

The petitioner argued that for AY 2015–16, the maximum permissible period for issuance of notice under Section 148, as per the unamended Section 149(1)(b), was six years from the end of the relevant assessment year, which expired on 31.03.2022. It was contended that the Assessing Officer could not disregard the binding judgment of the Delhi High Court in Manju Somani vs. Income Tax Officer, merely on the ground that the Department was examining the possibility of filing an SLP. Reliance was also placed on the Supreme Court judgment in Union of India vs. Rajeev Bansal.

Respondent’s Arguments

The Revenue submitted that the decision in Manju Somani was recent and that the Department was examining whether to accept the judgment or challenge it before the Supreme Court. On this basis, the Assessing Officer proceeded with the reassessment to avoid loss of revenue.

Court Order / Findings

The Delhi High Court held that the Assessing Officer’s approach was unsustainable in law. The Court reiterated that the first proviso to Section 149 contains a negative command prohibiting issuance of notice under Section 148 for assessment years prior to 01.04.2021 if the limitation under the pre-amendment law had already expired. Relying on Manju Somani and the Supreme Court judgment in Rajeev Bansal, the Court held that reassessment for AY 2015–16 was clearly time-barred. The Court further observed that mere contemplation of filing an SLP does not dilute the binding nature of a High Court judgment.

Important Clarification

The Court clarified that for assessment years preceding 01.04.2021, reassessment proceedings initiated after that date must strictly satisfy the limitation period as it existed prior to the Finance Act, 2021. Authorities cannot ignore binding precedent on the assumption that the issue may be reconsidered in future proceedings.

Final Outcome

The writ petition was allowed. The impugned order dated 31.08.2024 passed under Section 148A(d) of the Income-tax Act and the consequential notice issued under Section 148 for Assessment Year 2015–16 were quashed as being barred by limitation and without jurisdiction. The petition and all pending applications were disposed of accordingly.

Link to Download Order- https://www.mytaxexpert.co.in/uploads/1769502504_GOPALBANSALVsASSISSTANTCOMMISSIONEROFINCOMETAX.pdf 

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