Top Stories No Issuance of Income Tax Notice Beyond 10 years from Relevant Assessment Year as per S.149 r/w 153C: Delhi HC [Read Order] The Respondent Revenue claimed that procedure under Section 148A of the Income Tax Act, 1961 was not required to be followed in case of unearthing of incriminating material. By Avinash Kurungot – On November 10, 2024 12:48 pm – 2 mins read

The High Court of Delhi recently allowed a Petition filed against the Revenue holding that Income Tax Reassessment Notice may not be issued beyond a period of 10 years from the relevant Assessment Year (A.Y.) according to the provisions of Section 149 read with Section 153C of the Income Tax Act, 1961. The judgment was pronounced by the Delhi High Court while entertaining a writ petition filed by KAD Housing Private Limited, a Delhi-based builder and developer. The writ petitioner sought to impugn an income tax notice dated 31.08.2024 issued under Section 148 of the Income Tax Act, 1961 for reopening of their assessment for A.Y. 2015-16. Master GST Notice Replies – Drafting 20 Notices, Including Appeals – Register Now Respondent Revenue Department undertook the procedure to reopen the Petitioner’s assessment for A.Y. 2015-16 on the basis of a search conducted on 11.10.2023 on Sterling Agro Industries Ltd. On the basis of the material unearthed during the search, the Petitioner’s Jurisdictional Assessing Officer  contended that the petitioner’s income for A.Y. 2015-16 had escaped assessment and thereby issued notice under Section 148A(b) of the Income Tax Act, 1961.

Eventually, the Revenue dropped proceedings under Section 148A(b) and instead, passed order under Section 148A(d) of the Income Tax Act, 1961 citing that “in case any incriminating material was found in respect of a non-search party during the search proceedings, procedure under Section 148A of the Act is not required to be followed”. The Division Bench of the Delhi High Court constituting Justice Vibhu Bakhru and Justice Swarana Kanta Sharma referred to the recent decision of the Delhi High Court in The Pr. Commissioner of Income Tax -Central-1 v. Ojjus Medicare Pvt. Limited (2024) to observe that the limitation of ten years under Section 153C of the Act is to be calculated from the end of the relevant assessment year to the year under which the notice under Section 148 is served. Master GST Notice Replies – Drafting 20 Notices, Including Appeals – Register Now Additionally, the Petitioner through their counsel Sumit Lalchandani adduced a tabular statement listing each assessment year since A.Y. 2015-16, proving the passage of ten years from A.Y. 2015-16 as stipulated under Section 149 read with Section 153C of the Income Tax Act, 1961.

Aseem Chawla, SSC, Monica Benjamin, Priya Sarkar and Pratistha, counsels appearing for the Revenue concurred with the findings of the Court as per the precedents laid down, while keeping room for the Revenue to initiate alternative proceedings. In conclusion, the Delhi High Court set aside the impugned notice, barring the respondent Revenue from pursuing reassessment proceedings towards the Petitioner’s financials for A.Y. 2015-16.