Revenue department restrained from reassessment proceedings after Section 147 notice found beyond ten-year limitation period under Section 149(1)

The Delhi HC set aside a reopening notice issued under Section 147 for being beyond the limitation period prescribed under Section 149(1). Following the precedent in Ojjus Medicare Pvt. Limited, the court clarified that the ten-year limitation period must be calculated from the end of the assessment year relevant to when the Section 148 notice is issued. The court restrained the revenue department from proceeding with reassessment proceedings for AY 2015-16, finding the notice was issued beyond the statutory time limit.

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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.

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