2024 (11) TMI 433 - HC - Income Tax

Reopening of assessment u/s 147 - notice issued beyond the period of the limitation as stipulated under Section 149 (1) - HELD THAT - As in Ojjus Medicare Pvt. Limited 2024 (4) TMI 268 - DELHI HIGH COURT the Court explained the manner in which the period of six or ten years is required to be reckoned in respect of reopening of the assessment for a period prior to six years and/or before the expiry of ten years from the relevant assessment years as contemplated u/s 153C of the Act. The court held that the period of ten years is required to be reckoned from the end of the assessment year relevant to the year in which the notice under Section 148 of the Act is issued. In view of the above, the impugned notice is set aside. Consequently, the respondent is restrained from the proceeding with the re-assessment proceedings in respect of the AY 2015-16.

Summary

Issues:
Challenging the notice for reopening assessment beyond the limitation period as per Section 149(1) of the Income Tax Act, 1961.

Analysis:
The petitioner filed a petition challenging a notice dated 31.08.2024 issued under Section 148 of the Income Tax Act, 1961, for reopening the assessment for AY 2015-16, claiming it was beyond the limitation period specified in Section 149(1) of the Act. The petitioner argued that the notice was issued based on information from a search conducted on 11.10.2023, and thus, the notice was not valid under the Act's provisions. The AO dropped the proceedings under Section 148A(b) and concluded it was not a fit case for issuance of the notice under Section 148 of the Act. The key question was whether the notice was issued beyond the limitation period as per Section 149(1)(b) of the Act, which was addressed in previous decisions of the Co-ordinate Bench of the Court.

The Court referred to previous judgments, including Dinesh Jindal v. Assistant Commissioner of Income Tax, Central Circle 20, Delhi & Others and The Pr. Commissioner of Income Tax -Central-1 v. Ojjus Medicare Pvt. Limited, to analyze the issue. The Court emphasized the importance of the limitation period specified in Section 149 read with Section 153C of the Act for reopening assessments. The petitioner presented a tabular statement showing that the assessment for AY 2015-16 fell beyond the ten-year period stipulated under Section 149. The Revenue's counsel acknowledged the correctness of the tabular statement but reserved the right to challenge it in future proceedings.

The Court, based on the analysis and precedent, set aside the impugned notice and restrained the respondent from proceeding with the reassessment for AY 2015-16. The petition was allowed in favor of the petitioner, and pending applications were disposed of accordingly.