Income Tax Reassessment Notice for AY 2015-16 Issued Beyond 10 Years is Time-Barred: Delhi HC Quashes Proceedings [Read Order]

In the recent ruling, the Delhi High Court held that reassessment notice issued under Income Tax Act for Assessment Year 2015-16 beyond the outer limit of ten years was barred by limitation, and quashed the reassessment proceedings initiated.

UCB Developers LLP filed writ petition before Delhi High Court challenged notices along with consequential proceedings initiated under Section 148 of Income TaxAct, 1961, for AY 2015-16. The petitioner’s counsel argued that reassessment proceedings were initiated well beyond time permitted under law.

The petitioner had received notice under Section 148A(b) followed by order and reassessment notice. The petitioner argued that these notices were barred by limitation under second proviso to Section 149(1) of Act which prescribed maximum period of ten years for reopening assessments.

Read More: GST Notices for Old-Cancelled GSTIN Served Only via Portal:Madras HC allows Merger of Old & New GSTIN for ITC Utilisation [Read Order]

The counsel submitted that in Pankaj Jain, reassessment notice issued on 30 August 2024 for same assessment year had been quashed and present case was identical except for one-day difference in date of issuance of notice.

The Income Tax Department’s counsel attempted to distinguish facts of present case from those in Pankaj Jain, but was unable to point out any material difference that would change legal position.

The Division Bench comprising Justice Dinesh Mehta and Justice Vinod Kumar observed that even on plain reading of second proviso to Section 149(1), reassessment notice could not be sustained. The court explained that notice under Section 148A(d) was issued during Assessment Year 2025-26, and if ten-year period was counted backwards, the earliest year that could be reopened was AY 2016-17. The Court pointed out that reopening AY 2015–16 was clearly beyond permissible period.

The court further observed that facts of present case were identical to those in Pankaj Jain and minor difference in date of issuance of notice had no legal significance.

The court held that reassessment notice dated 31 August 2024 and all consequential proceedings were barred by limitation and could not be sustained. The writ petition was allowed, impugned notice and proceedings were quashed and all pending applications were disposed of.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates