HC Holds Reassessment Notice Valid Where Delay Resulted From Assessee Seeking Repeated Adjournments

Two companies challenged reassessment notices issued for AY 2017-18 before the Delhi High Court under the Income Tax Act, 1961. The Assessing Officer issued a show-cause notice under Section 148A(b) on 21 March 2024 asking the assessee to respond by 28 March 2024. Instead of filing a reply within the given time, the assessees sought adjournments and eventually submitted their response on 13 April 2024.

After considering the reply, the officer passed an order under Section 148A(d) and issued a reassessment notice under Section 148 on 15 April 2024. The assessees argued that the notice was time-barred since the limitation for AY 2017-18 expired on 31 March 2024.

Central Issue: Whether a reassessment notice issued after the limitation date becomes invalid when the delay occurred because the assessee sought additional time to file its reply.

Tribunal’s Decision: The Delhi High Court dismissed the petitions and upheld the notice. The Court noted that the proceedings under Section 148A(b) had begun on 21 March 2024, well within the limitation period. The delay in issuing the final notice occurred only because the assessee sought repeated adjournments.

Relying on the proviso to Section 149(1) of the Income Tax Act, 1961, the Court held that the time granted to the assessee for filing a reply must be excluded while calculating the limitation. Since the delay was attributable to the assessee itself, the notice dated 15 April 2024 was held to be valid and not time-barred.

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