Section 148 notice invalid for AY 2013-14 as it exceeded ten-year block period under Section 153C

The Delhi HC held that a notice u/s 148 for AY 2013-14 was invalid as it fell beyond the ten-year block period under Section 153C read with Section 153A. Following a search operation on the Alankit Group in October 2019, the petitioner received a Section 153C notice in March 2022, with assessment completed in March 2023. A subsequent notice u/s 148 related to another search in February 2022. The court noted that under Section 149(1) proviso, reopening action could only be initiated up to AY 2014-15, making the impugned notice unsustainable.

---

---

Issues:
1. Validity of notice dated 31 March 2023 under Section 148 of the Income Tax Act, 1961 for Assessment Year 2013-14.

Analysis:
The High Court analyzed the validity of the notice issued under Section 148 of the Income Tax Act, 1961 for Assessment Year 2013-14. The Court noted that the notice was issued on 31 March 2023, falling under the amended regime of reassessment effective from 01 April 2021. The Court referred to the provisions of the First Proviso to Section 149(1) of the Act, which sets the time limit for issuing a notice for a relevant assessment year. The Court emphasized that any action for reassessment before 01 April 2021 must comply with the timeframes specified under Section 149(1)(b), Section 153A, or Section 153C as they existed before the Finance Act, 2021.

The Court observed that the assessment for AY 2013-14 could not have been reopened based on the relevant provisions. It considered additional facts, including a search and seizure operation in the Alankit Group, leading to a notice under Section 153C and subsequent assessment orders. The Court also mentioned a search in the Proform Group, highlighting that action for reopening could have been initiated only up to AY 2014-15 based on the proviso to Section 149(1).

Referring to previous judgments, the Court cited the decision in Filatex India Ltd. vs. Deputy Commissioner of Income Tax, addressing the computation of the time limit for the relevant assessment year under Section 153C. The Court reiterated the legal position concerning the starting block for the six and ten-year periods, emphasizing the significance of the date of receipt of books of accounts in such assessments. Based on these considerations, the Court concluded that the impugned notice dated 13 March 2023 under Section 148 of the Act could not be sustained.

Consequently, the High Court allowed the writ petition, quashing the notice dated 31 March 2023 under Section 148 of the Act. The Court's detailed analysis of the relevant provisions and precedents led to the decision to invalidate the notice for reassessment of AY 2013-14.

---