The Delhi High Court ruled that income tax assessments cannot be reopened beyond three years, regardless of reassessment rules. The ruling pertained to a tax notice sent to the Nationalist Congress Party (NCP) for the fiscal year 2015-16, which was deemed overdue and must be annulled under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA).
The HC’s ruling, based on a 2024 Supreme Court decision in Union of India v. Rajeev Bansal, stated that tax notices issued after April 1, 2021, for assessment years before 2016-17, exceeding the time limit, would be invalid. This interpretation of TOLA was affirmed in the MakeMyTrip case, as referenced by the High Court.
The Delhi HC’s ruling impacts taxpayers by restricting how long the tax department can revisit old cases. It assures individuals and businesses that their cases won’t be reopened after three years without new compelling evidence. Taxpayers can now challenge reassessment notices exceeding this limit more easily in court.
The HC ruling covers cases reassessed under old rules (before April 2021) and the new regime (after April 2021), establishing a precedent for future cases. Courts may invalidate time-barred notices more frequently, citing this judgment in similar cases.
Sources News From Various Digital Platforms, Websites, Journalists, And Agencies.
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