2026 (2) TMI 372 - HC - Income Tax

Reopening of income tax assessment under limitation rules and statutory relaxation; notice and consequential orders quashed, appeal to be withdrawn.

Reopening of assessment under Section 147 was challenged on limitation grounds and on validity of the notice issued after the Taxation and Other Laws ... Reopening of assessment u/s 147 - Period of limitation - scope of period prescribed under the Taxation and Other Laws (Relaxation and Amendment of certain Provisions) Act, 2020 - HELD THAT:- As far as the delay is concerned, we note that the Petitioner has explained the same in her Writ Petition. We may also observe that since the Department has unequivocally conceded the issue in question before the Hon’ble Supreme Court in Rajeev Bansal [2024 (10) TMI 264 - SUPREME COURT (LB)] we do not deem it appropriate to deny relief to the Petitioner solely on the ground of delay. Any delay on the part of the Petitioner would not validate a notice which is otherwise declared to be invalid in the eyes of law, more so when the Department has initiated recovery proceedings based upon such notice. We thus find merit in the submissions canvassed on behalf of the Petitioner that the impugned Notice under Section 148 of the IT Act and all consequential Orders/Notices for A.Y.2015-16, are bad in law. Accordingly, the impugned Notice dated 14th April 2022 issued under Section 148 of the IT Act (Exhibit ‘D’), the Assessment Order (Exhibit ‘H’), and all consequential orders/notices including recovery notices thereof are hereby quashed and set aside. In light of the above, Petitioner, on instructions, undertakes to withdraw the Appeal filed by the Petitioner before the Commissioner of Income Tax (Appeals), within a period of 2 weeks from the date of uploading this Order. Issues: Whether the notice dated 14 April 2022 issued under Section 148 of the Income-tax Act, 1961 for A.Y.2015-16 and the consequential assessment and recovery orders are valid or liable to be quashed.Analysis: The petition challenges a Section 148 notice dated 14 April 2022 and consequential assessment and recovery actions for A.Y.2015-16. The Court noted the Revenue's concession recorded in the Supreme Court in Union of India v. Rajeev Bansal that for A.Y.2015-16 all notices issued on or after 1 April 2021 are required to be dropped as they would not fall for completion during the period prescribed under the Taxation and Other Laws (Relaxation and Amendment of certain Provisions) Act, 2020. The Supreme Court's concession was followed in subsequent authority (Deepak Steel). The Court observed that these authorities directly govern the validity of the impugned notice and related orders. The petitioner's explanation for delay was considered but found not to cure or validate a notice held invalid by law; the existence of recovery proceedings based on the impugned orders added urgency to quashing those orders. The Court also relied on prior decisions of this High Court applying the same principle and allowing similar relief where notices for A.Y.2015-16 were issued on or after 1 April 2021.Conclusion: The notice dated 14 April 2022 issued under Section 148 of the Income-tax Act, 1961 for A.Y.2015-16, the assessment order dated 19 February 2024 under Section 147 read with Sections 144 and 144B, and all consequential orders/notices including recovery notices are quashed and set aside; relief is granted to the petitioner (in favour of the assessee).