New 10-Year Limit u/s 149 of Income Tax Applies Prospectively, 6-Year Rule Governs AYs Before 2021-22: Delhi HC [Read Order]
The Delhi High Court rules that the 10-year reassessment limit applies only from AY 2021–22 onwards
![New 10-Year Limit u/s 149 of Income Tax Applies Prospectively, 6-Year Rule Governs AYs Before 2021-22: Delhi HC [Read Order]](https://images.taxscan.in/h-upload/2025/07/17/2064545-proving-beyond-reasonable-doubt-applies-penal-laws-tax-reassessment-reason-to-believe-delhi-hc-taxscan.webp "New 10-Year Limit u/s 149 of Income Tax Applies Prospectively, 6-Year Rule Governs AYs Before 2021-22: Delhi HC [Read Order]")
In a recent ruling, the Delhi High Court observed that the new ten-year time limit for reopening income tax assessments under Section 149 ofthe Income Tax Act applies only prospectively, and for assessment years before 2021-22, the old six-year limitation continues to apply.Planning smarter for FY 2025–26? Don’t miss this trusted guide used by thousands of tax professionals &...
In a recent ruling, the Delhi High Court observed that the new ten-year time limit for reopening income tax assessments under Section 149 ofthe Income Tax Act applies only prospectively, and for assessment years before 2021-22, the old six-year limitation continues to apply.
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Sanjay Bansal filed a writ petition challenging a notice issued under Section 148 for the assessment year 2016-17. The petitioner’s counsel argued that the notice dated 15.04.2024 was issued beyond the permissible six-year period under the earlier provisions of the Act and was therefore time-barred.
The income tax department’s counsel argued that the notice was valid because it was issued following directions given in an earlier case Twylight Infrastructure Pvt. Ltd. v. ITO and that the time taken in those proceedings should be excluded when calculating the limitation period under Section 153.
The petitioner’s counsel argued that the previous litigation did not delay or restrict the department from taking lawful action within the original limitation period, and that the notice in Twylight Infrastructure had been set aside due to procedural errors, not due to any legal restraint imposed by the court.
The division bench, comprising Justice Vibhu Bakhru and Justice Tejas Karia, observed that the limitation period for issuing such notices is governed by the old regime if the assessment year is before 2021-22.
The court further observed that earlier court proceedings do not automatically extend or suspend the limitation period, especially if the original notice was set aside for procedural non-compliance.
The court held that the notice dated 15.04.2024 was issued after the expiry of the six-year period from the end of the assessment year 2016-17, and so it was time-barred. The reassessment proceedings based on that notice were therefore invalid.
The court allowed the writ petition and quashed the notice and reassessment proceedings. The pending application was also disposed of.
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