What Is The Time Period Surviving U/S 149 Of Income Tax Act For Issuing Reassessment Notices: Delhi High Court Explains

A division bench of Justices Yashwant Varma and Harish Vaidyanathan Shankar concluded that the period between 20 March 2020 to 30 June 2021 would be excluded from limitation, in view of Section 3(1) of Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020.

Further, the period between the date of issuance of the impugned reassessment notices (if falling between 20 March 2020 to 30 June 2021) up to the date of the decision rendered by the Supreme Court in Ashish Agarwal case (04 May 2022), would also be excluded, in light of third proviso to Section 149(1).

The bench added that the third period which is liable to be excluded is the time for furnishing objections by the assessee.

“It is the aforenoted three periods which are thus liable to be added to the date when the notice for reassessment was issued in order to answer the question as to whether the reassessment notices could be said to be barred by the timelines as prescribed by Section 149 of the Act,” it held.

The development comes in a batch of petitions contending that a reassessment action commenced in violation of the time frames which stood enumerated in Section 149 prior to the amendments introduced by Finance Act, 2021 would be liable to be struck down on that score.

It was argued that the first proviso to Section 149(1) compels the Department to consider the stipulations of time which govern the commencement of reassessment action basis the limitation prescribed in that provision, as it existed prior to its amendment in 2021.

Several other questions raised in the batch were answered as follows:

Petitioners contended that by virtue of Section 151A which introduced faceless assessment, the jurisdictional Assessing Officer would have no authority to undertake a reassessment.

The bench cited its judgment in T.K.S. Builders (P) Ltd. v. Income Tax Officer (2024) where it was clarified that both the Faceless Assessment Officer and Jurisdictional Assessment Officer have concurrent jurisdiction as far as assessment, re-assessment or re-computation under Section 147 of the Income Tax Act.

It also rejected the contention of Petitioners that once reassessment is triggered by a search, it would be incumbent upon the respondents to proceed only in accordance with Sections 153A or 153C as the case may be and to the exclusion of Section 148 of the Act.

It cited Pr. Commissioner of Income Tax-7 v. Naveen Kumar Gupta (2024) where the High Court had held that Section 153C does not by itself preclude an Assessing Officer from reopening assessments under Section 147/148 of the Act, on the basis of information found during a search conducted under Section 132 or requisition made under Section 132A of Act in respect of another person.

Challenge was also thrown to Section 148 notices having been issued without a DIN, as mandated by Circular No. 19/2019 issued by the CBDT.

The High Court however refused to answer it, stating that Commissioner of Income Tax v. Brandix Mauritius Holdings Ltd. (2023) where it was held that assessments, appeals, orders issued without a DIN can have no standing in law, is presently forming subject matter of a challenge before the Supreme Court and interim order is operational therein.

So far the challenge to the CBDT Instruction No. 1/2022 dated 22 May 2022 is concerned for being contrary to the decision of Supreme Court in Union of India vs Ashish Agarwal (2023), High Court said the issue would no longer survive in light of the subsequent decision handed down by the Supreme Court in Rajeev Bansal case.

Case title: Kanwaljeet Kaur v. Assistant Commissioner Of Income Tax Circle (34) 1 Delhi & Ors. and batch

Citation: 2025 LiveLaw (Del) 141

Case no.: W.P.(C) 3908/2023

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