Facts of the Case

The petitioner, Ameya Commercial Projects Private Limited, filed a writ petition challenging the order dated 22.07.2022 passed under Section 148A(d) of the Income-tax Act, 1961 and the consequential notice dated 22.07.2022 issued under Section 148 for Assessment Year 2013–14.

An initial notice under Section 148 was issued on 30.06.2021 under the unamended reassessment regime. The said notice was rendered invalid following the decision of the Delhi High Court in Mon Mohan Kohli. However, pursuant to the directions of the Supreme Court in Union of India vs. Ashish Agarwal, the notice was deemed to be a notice under Section 148A(b). In compliance, the Assessing Officer furnished material to the assessee on 25.05.2022 and granted time to respond by 09.06.2022. The assessee submitted its reply on 08.06.2022. Thereafter, the Assessing Officer passed the impugned order under Section 148A(d) and issued the notice under Section 148 on 22.07.2022.

Issues Involved

Whether the notice issued under Section 148 for Assessment Year 2013–14 was barred by limitation under Section 149, how limitation was to be computed after applying the fifth and sixth provisos to Section 149 in light of the Supreme Court decisions in Ashish Agarwal and Rajeev Bansal, and whether the reassessment proceedings were sustainable in law.

Petitioner’s Arguments

The petitioner contended that the six-year limitation period for AY 2013–14 expired on 31.03.2020 and was extended only up to 30.06.2021 by virtue of TOLA. Since the original notice was issued on the last permissible date, there was no residual time available after exclusion under the fifth proviso to Section 149. In terms of the sixth proviso, the Assessing Officer could issue the notice under Section 148 only within seven days from the date of receipt of the assessee’s reply, making 16.06.2022 the outer limit. The notice issued on 22.07.2022 was therefore time-barred.

Respondent’s Arguments

The Revenue did not dispute that the controversy was covered by the binding decision of the Delhi High Court in Ram Balram Buildhome Pvt. Ltd. vs. Income Tax Officer, and fairly conceded that the impugned notice could not be sustained in view of the settled legal position.

Court Order / Findings

The Delhi High Court analysed the statutory framework of Section 149 along with the fifth and sixth provisos as interpreted by the Supreme Court in Union of India vs. Rajeev Bansal. The Court held that since the original notice was issued on the last day of limitation, only seven days were available to the Assessing Officer under the sixth proviso after receipt of the assessee’s reply on 09.06.2022.

The Court found that the last permissible date for issuing the notice under Section 148 was 16.06.2022 and that the notice dated 22.07.2022 was clearly beyond limitation. The Court noted that the issue was squarely covered by its earlier decision in Ram Balram Buildhome Pvt. Ltd., which was binding on the Revenue.

Important Clarification

The Court clarified that computation of limitation under Section 149 must strictly follow the exclusions and extensions provided by statute and judicial interpretation. Once the outer time limit expires, the Assessing Officer lacks jurisdiction to proceed further, and reassessment proceedings cannot be sustained.

Final Outcome

The writ petition was allowed. The Delhi High Court set aside the order dated 22.07.2022 passed under Section 148A(d), the notice dated 22.07.2022 issued under Section 148 for Assessment Year 2013–14, and all proceedings initiated pursuant thereto. The pending application was also disposed of accordingly.

Link to download the order - https://www.mytaxexpert.co.in/uploads/1769676121_AMEYACOMMERCIALPROJECTSPRIVATELIMITEDVsASSISTANTCOMMISSIONEROFINCOMETAXCIRCLE11DELHIORS..pdf

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