Delhi HC to decide if ITO can revive Income Tax case dating Back to 1996

The Delhi High Court will soon come up with judgement on a very big matter: Can the tax department go back and check really old tax cases from way back in 1996? Some companies, like UK Paints (Overseas) Ltd, BJN Holdings (India) Ltd., and KS Dhingra, got notices from the tax department saying, “We want to check your old tax files again.” But these files are super old: some from 1997! The companies went to court saying, “This is not fair!”

Back in 2012, the government changed the rules to catch people hiding money abroad. Before 2012, tax officers could only go back and recheck your taxes for 6 years. After 2012, they said, “Now we can go back 16 years—but only for cases involving foreign money.” The government wanted to catch black money stored in foreign countries.

After this rule change, the tax department sent notices to people for really old cases, some dating back to 1996! But the companies are asking, “Is this fair? These cases were already too old under the previous 6-year rule. Can you really bring them back to life now using the new 16-year rule”?

Two judges, Justice Vibhu Bakhru and Justice Tejas Karia, heard this case on May 30. But they said, “This is too big a question for just us two.” So they’re sending it to a larger group of judges to decide. The big question is: If a tax case was already “expired” under the old rule, can the government use the new rule to revive it?

This decision will affect many people and companies who have foreign assets. If the court says Yes, the tax department is allowed to do this; many more old cases may reopen. If they say No, then those cases stay dead. For now, everyone is waiting to see what the bigger group of judges will decide.