Facts of the Case

The petitioner, Sanjay Bansal, filed a writ petition challenging the notice dated 15.04.2024 issued under Section 148 of the Income-tax Act, 1961 for Assessment Year 2016–17. The impugned notice was issued pursuant to an order passed on the same date under Section 148A(d). The petitioner contended that the notice was barred by limitation under the first proviso to Section 149 of the Act.

Issues Involved

Whether the notice issued under Section 148 for Assessment Year 2016–17 was barred by limitation under Section 149, whether limitation could be extended on account of prior litigation or earlier court directions, and whether reliance on Twylight Infrastructure Pvt. Ltd. justified issuance of a fresh notice beyond the prescribed time.

Petitioner’s Arguments

The petitioner submitted that the impugned notice was ex facie time-barred and squarely covered by the decision of the Delhi High Court in Manju Somani vs. Income Tax Officer Ward-70(1) and the judgment of the Supreme Court in Union of India vs. Rajeev Bansal. It was argued that prior to the amendments to Sections 147–151, the maximum permissible period for issuance of notice was six years, which had expired for AY 2016–17, and the first proviso to Section 149 prohibited issuance of notice thereafter.

Respondent’s Arguments

The Revenue contended that the impugned notice had been issued pursuant to directions and findings of the Delhi High Court in Twylight Infrastructure Pvt. Ltd. vs. Income Tax Officer Ward 25(3) and that, therefore, limitation stood extended in terms of Section 153 of the Act.

Court Order / Findings

The Delhi High Court held that it was undisputed that the impugned notice was time-barred and the issue stood squarely covered by Manju Somani and Union of India vs. Rajeev Bansal. The Court examined the Revenue’s reliance on Twylight Infrastructure Pvt. Ltd. and rejected the contention, holding that the controversy was squarely covered by the subsequent decision in Abhinav Jindal vs. Assistant Commissioner of Income Tax, wherein it was held that time spent by an assessee in successfully challenging an earlier invalid notice cannot be excluded for extending limitation.

The Court reiterated that there was no court order impeding the Revenue from issuing a valid notice within limitation, and failure to act in accordance with law could not be used to claim extension of the statutory time limit prescribed under Section 149.

Important Clarification

The Court clarified that limitation under Section 149 is mandatory and cannot be extended merely because an earlier notice was set aside or because the assessee pursued litigation. Prior proceedings do not confer any right on the Revenue to issue a fresh notice beyond limitation unless expressly permitted by statute.

Final Outcome

The writ petition was allowed. The Delhi High Court set aside the notice dated 15.04.2024 issued under Section 148 for Assessment Year 2016–17 and the reassessment proceedings initiated pursuant thereto. The pending application was also disposed of accordingly.

 

Link to Download Order- https://www.mytaxexpert.co.in/uploads/1769595431_SANJAYBANSALVsINCOMETAXOFFICER.pdf 

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