Rajmani Securities Pvt Ltd vs Income Tax Officer, Ward 21.1., Delhi

$~80 & 81
* IN THE HIGH COURT OF DELHI AT NEW DELHI
th
% Date of decision: 26 February,2026
+ W.P.(C) 19738/2025 & CM APPL. 82448/2025
BKR CAPITAL PVT. LTD .....Petitioner
Through: Mr. Mukul Katyal, Adv.

versus

INCOME TAX OFFICER, WARD 4.1., DELHI .....Respondent
Through: Mr. Ruchir Bhatia, SSC with Mr.
Anant Mann, JSC.

+ W.P.(C) 19769/2025 & CM APPL. 82587/2025
RAJMANI SECURITIES PVT LTD .....Petitioner
Through: Mr. Mukul Katyal, Adv.

versus

INCOME TAX OFFICER, WARD 21.1., DELHI .....Respondent
Through: Mr. Sunil Agarwal, SSC with Ms.
Monica Benjamin, JSC, Mr. Gibran
Naushad, JSC & Mr. Rohit
Chakraborty, Adv.


CORAM:
HON'BLE MR. JUSTICE DINESH MEHTA
HON'BLE MR. JUSTICE VINOD KUMAR
J U D G M E N T
REPORTABLE
DINESH MEHTA, J. (ORAL)
1. By way of the instant petitions preferred under Article 226 of the
Signature Not Verified
Digitally Signed
By:NAVEEN KUMAR
Signing Date:11.03.2026
15:43:06
W.P.(C) 19738/2025 & W.P.(C) 19769/2025 Page 1 of 14

Constitution of India, the petitioners allege that the notices under section
148 of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act of
1961’) which have been issued for Assessment Year (AY) 2017-18 on
15.04.2024, and 06.04.2024 are without jurisdiction, having been issued
after the prescribed period of limitation.
2. As both the writ petitions involve identical facts and question of law,
they are being decided conjointly. However, the facts of BKR Capital Pvt.
Ltd., being W.P.(C) 19738/2025, are being taken into consideration.

3. The petitioner filed its return of income for AY 2017-18 on
29.10.2017, declaring an income of Rs.13,63,270/-. The respondent-
Assessing Officer (AO) issued a show-cause notice dated 21.03.2024 to the
petitioner for the purpose of reassessment, invoking the provisions of section
148A(b) of the Act of 1961. The aforesaid notice dated 21.03.2024 required
the petitioner to file a reply on or before 28.03.2024, on which date, the
petitioner requested the AO to grant some time and the matter came to be
adjourned to 08.04.2024.
4. On 08.04.2024, the petitioner again sought a week’s time to file a
reply and the matter got deferred to 13.04.2024, on which date, the
petitioner filed a response to the notice dated 21.03.2024. On 15.04.2024,
the AO rejected petitioner’s objection by way of an order under section
148A(d) of the Act of 1961 and proceeded to issue a notice under section
148 of the Act of 1961.
5. The said notice dated 15.04.2024 has been assailed on the ground of
jurisdiction, as according to the petitioner, the limitation for issuing notice
under section 148 of the Act of 1961 was over on 31.03.2024. Learned
Signature Not Verified
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By:NAVEEN KUMAR
Signing Date:11.03.2026
15:43:06
W.P.(C) 19738/2025 & W.P.(C) 19769/2025 Page 2 of 14

counsel for the petitioner argued that since the limitation for issuing notice
under section 148 of the Act of 1961 as given under the then prevailing
st
provisions of section 149(1) (1 proviso) was only up to 31.03.2024 (6
years). The impugned notice dated 15.04.2024 is void ab-initio, as the AO
ceased to have power or jurisdiction to issue notice on such date.
6. In order to bring his argument home, he read the text of section 149 of
the Act of 1961, as it stood prior to its substitution w.e.f. 01.09.2024 (by
virtue of Finance Act, 2024) and relied upon the judgment rendered by the
Hon’ble Rajasthan High Court in D.B. Civil Writ Petition No.10540/2024
titled Shree Cement Ltd. vs. Assistant Commissioner of Income Tax,
Central Circle & Ors .
7. Mr. Ruchir Bhatia, learned Senior Standing Counsel for the
respondent in W.P.(C) 19738/2025, on the other hand, submitted that though
the facts as narrated by the petitioner are correct and the impugned notice
under section 148 of the Act of 1961 appears to have been issued beyond
limitation but if the facts in their entirety are taken into account, it can be
safely concluded that the time for issuing the notice had not actually lapsed.
8. In this regard, he highlighted that the notice under section 148A(b) of
the Act of 1961 was issued on 21.03.2024 requiring the petitioner to file
reply on 28.03.2024, which the petitioner did not and on the contrary, he
sought an adjournment. And on the subsequent date of hearing (08.04.2024)
as well, the petitioner sought further time to file reply, where upon the
matter was fixed for 13.04.2024. He submitted that the petitioner’s
objections were ultimately rejected and upon disposal of the petitioner’s
representation/reply as required under Section 148A(d) of the Act of 1961,
Signature Not Verified
Digitally Signed
By:NAVEEN KUMAR
Signing Date:11.03.2026
15:43:06
W.P.(C) 19738/2025 & W.P.(C) 19769/2025 Page 3 of 14

the impugned notice under Section 148 of the Act of 1961 was
simultaneously issued.
9. He argued that since at the petitioner’s own request, the matter was
adjourned, by virtue of fifth proviso to Section 149(1) of the Act of 1961,
the period between 28.03.2024 to 15.04.2024 is required to be extended. He
argued that the petitioner’s contention that the notice is barred by limitation
is untenable in law.
10. In rejoinder, learned counsel for the petitioner relied upon the
judgment of this Court in the case of Manju Somani v. Income Tax Officer
reported in (2024) 165 taxman.com 675 and also submitted that there are a
number of judgments of different High Courts supporting the stand of the
petitioner.
11. So far as precedent on the issue in hand is concerned, Mr. Bhatia
submitted that firstly, the judgment of this Court in the case of Manju
Somani (supra) does not deal with the facts peculiar to this case, more
particularly effect of fifth proviso to Section 149 (1) of the Act of 1961. He
relied upon judgment of this Court in the case of Raminder Singh v.
Assistant Commissioner of Income Tax , (2023) 156 taxman.com 148.
12. Learned counsel for respondent submitted through written submission
that Section 149(1) must be read as a whole. The First Proviso cannot be
interpreted in isolation from the Fifth and Sixth Provisos. All provisos form
part of one composite limitation framework and must be harmoniously
construed. In the present case, notice under Section 148A(b) was issued on
21.03.2024, before the bar contemplated under the First Proviso applied.
The date of issuance of notice is therefore crucial. The Petitioner’s
Signature Not Verified
Digitally Signed
By:NAVEEN KUMAR
Signing Date:11.03.2026
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W.P.(C) 19738/2025 & W.P.(C) 19769/2025 Page 4 of 14

contention that only the First Proviso governs the issue is misconceived.
Such an interpretation would render the Fifth Proviso otiose or ineffective,
which is impermissible in law. It is a settled principle that statutory
provisions must be interpreted so as to give effect to every part of the
section. The First Proviso merely protects assessees from retrospective
enlargement of limitation from six years to ten years. It does not override the
statutory exclusion mechanism expressly provided under the Fifth and Sixth
Provisos. Accordingly, limitation must be computed by giving effect to all
provisos together, and the proceedings are within time.
13. Heard learned counsel for the parties and perused the material
available on record. For better appreciation of the issue involved, the
relevant statutory provisions, particularly Section 149 as substituted by the
Act of 2021 w.e.f. 01.04.2021 and Section 149 of the Act of 2024 (No.1) as
substituted by the Finance Act, 2021 w.e.f. 01.04.2021 are reproduced
hereunder:-
Section 149 (As substituted by the Finance Act 2021)
“149. Time limit for notice .
(1) No notice under section 148 shall be issued for the
relevant assessment year,—

(a) if three years have elapsed from the end of the
relevant assessment year, unless the case falls under
clause (b);
(b) if three years, but not more than ten years, have
elapsed from the end of the relevant assessment year
unless the Assessing Officer has in his possession books
of account or other documents or evidence which reveal
that the income chargeable to tax, represented in the form
of asset, which has escaped assessment amounts to or is
likely to amount to fifty lakh rupees or more for that year:
Signature Not Verified
Digitally Signed
By:NAVEEN KUMAR
Signing Date:11.03.2026
15:43:06
W.P.(C) 19738/2025 & W.P.(C) 19769/2025 Page 5 of 14

Provided that no notice under section 148 shall be issued
at any time in a case for the relevant assessment year
beginning on or before 1st day of April, 2021, if such
notice could not have been issued at that time on account
of being beyond the time limit specified under the
provisions of clause (b) of sub-section (1) of this section,
as they stood immediately before the commencement of
the Finance Act, 2021:

Provided further that the provisions of this sub-section
shall not apply in a case, where a notice under section
153A, or section 153C read with section 153A, is
required to be issued in relation to a search initiated
under section 132 or books of account, other documents
or any assets requisitioned under section 132A, on or
before the 31st day of March, 2021:

Provided also that for the purposes of computing the
period of limitation as per this section, the time or
extended time allowed to the assessee, as per show-cause
notice issued under clause (b) of section 148A or the
period during which the proceeding under section 148A
is stayed by an order or injunction of any court, shall be
excluded:

Provided also that where immediately after the exclusion of the
period referred to in the immediately preceding proviso, the
period of limitation available to the Assessing Officer for passing
an order under clause (d) of section 148A is less than seven days,
such remaining period shall be extended to seven days and the
period of limitation under this sub-section shall be deemed to be
extended accordingly.

Explanation.—For the purposes of clause (b) of this sub-section,
"asset" shall include immovable property, being land or building
or both, shares and securities, loans and advances, deposits in
bank account.
(2) The provisions of sub-section (1) as to the issue of notice
Signature Not Verified
Digitally Signed
By:NAVEEN KUMAR
Signing Date:11.03.2026
15:43:06
W.P.(C) 19738/2025 & W.P.(C) 19769/2025 Page 6 of 14

shall be subject to the provisions of section 151.]

Section 149 (As substituted by the Finance Act of 2021)

“149. Time limit for notice
149. (1) No notice under section 148 shall be issued for
the relevant assessment year,—

(a) if three years have elapsed from the end of the
relevant assessment year, unless the case falls under
clause (b);

(b) if three years, but not more than ten years, have
elapsed from the end of the relevant assessment year
unless the Assessing Officer has in his possession books
of account or other documents or evidence which reveal
that the income chargeable to tax, represented in the form
of—
(i) an asset;
(ii) expenditure in respect of a transaction or in relation
to an event or occasion; or
(iii) an entry or entries in the books of account,
which has escaped assessment amounts to or is likely to
amount to fifty lakh rupees or more:

Provided that no notice under section 148 shall be issued
at any time in a case for the relevant assessment year
beginning on or before 1st day of April, 2021, if [a notice
under section 148 or section 153A or section 153C could
not have been issued at that time on account of being
beyond the time limit specified under the provisions of
clause (b) of sub-section (1) of this section or section
153A or section 153C, as the case may be], as they stood
immediately before the commencement of the Finance
Act, 2021:

Provided further that the provisions of this sub-section
shall not apply in a case, where a notice under section
153A, or section 153C read with section 153A, is
Signature Not Verified
Digitally Signed
By:NAVEEN KUMAR
Signing Date:11.03.2026
15:43:06
W.P.(C) 19738/2025 & W.P.(C) 19769/2025 Page 7 of 14

required to be issued in relation to a search initiated
under section 132 or books of account, other documents
or any assets requisitioned under section 132A, on or
before the 31st day of March, 2021:

Provided also that for cases referred to in clauses (i), (iii)
and (iv) of Explanation 2 to section 148, where,—

(a) a search is initiated under section 132; or
(b) a search under section 132 for which the last of
authorisations is executed; or
(c) requisition is made under section 132A,

after the 15th day of March of any financial year and the
period for issue of notice under section 148 expires on the
31st day of March of such financial year, a period of
fifteen days shall be excluded for the purpose of
computing the period of limitation as per this section and
the notice issued under section 148 in such case shall be
deemed to have been issued on the 31st day of March of
such financial year:

Provided also that where the information as referred to in
Explanation 1 to section 148 emanates from a statement
recorded or documents impounded under section 131 or
section 133A, as the case may be, on or before the 31st
day of March of a financial year, in consequence of,—

(a) a search under section 132 which is initiated; or
(b) a search under section 132 for which the last of
authorisations is executed; or
(c) a requisition made under section 132A,

after the 15th day of March of such financial year, a
period of fifteen days shall be excluded for the purpose of
computing the period of limitation as per this section and
the notice issued under clause (b) of section 148A in such
case shall be deemed to have been issued on the 31st day
of March of such financial year:

Signature Not Verified
Digitally Signed
By:NAVEEN KUMAR
Signing Date:11.03.2026
15:43:06
W.P.(C) 19738/2025 & W.P.(C) 19769/2025 Page 8 of 14

Provided also that for the purposes of computing the
period of limitation as per this section, the time or
extended time allowed to the assessee, as per show-cause
notice issued under clause (b) of section 148A or the
period during which the proceeding under section 148A
is stayed by an order or injunction of any court, shall be
excluded:

Provided also that where immediately after the exclusion
of the period referred to in the immediately preceding
proviso, the period of limitation available to the
Assessing Officer for passing an order under clause (d) of
section 148A does not exceed seven days, such remaining
period shall be extended to seven days and the period of
limitation under this sub-section shall be deemed to be
extended accordingly.

Explanation.—For the purposes of clause (b) of this sub-
section, "asset" shall include immovable property, being
land or building or both, shares and securities, loans and
advances, deposits in bank account.

(1A) Notwithstanding anything contained in sub-section
(1), where the income chargeable to tax represented in
the form of an asset or expenditure in relation to an event
or occasion of the value referred to in clause (b) of sub-
section (1), has escaped the assessment and the
investment in such asset or expenditure in relation to
such event or occasion has been made or incurred, in
more than one previous years relevant to the assessment
years within the period referred to in clause (b) of sub-
section (1), a notice under section 148 shall be issued for
every such assessment year for assessment, reassessment
or recomputation, as the case may be.
(2) The provisions of sub-section (1) as to the issue of
notice shall be subject to the provisions of section 151.

14. The issue which arises for consideration is, whether the notice dated
15.04.2024 issued under Section 148 of the Act of 1961 for AY 2017-18 is
Signature Not Verified
Digitally Signed
By:NAVEEN KUMAR
Signing Date:11.03.2026
15:43:06
W.P.(C) 19738/2025 & W.P.(C) 19769/2025 Page 9 of 14

barred by limitation.
15. It is not in dispute that, under the then prevailing provisions of
Section 149 of the Act of 1961, the normal period for limitation for issuance
of notice under section 148 of the Act of 1961 expired on 31.03.2024. It is
also not in dispute that prior to such date, the AO had issued notice (on
21.03.2024) under Section 148A(b), calling upon the petitioner to file its
reply by 28.03.2024. Therefore, the proceedings were initiated within the
limitation period.

16. Admittedly, the Petitioner did not file its reply within the time
originally granted. On 28.03.2024, the petitioner sought an adjournment and
the matter was deferred to 08.04.2024, on which date the petitioner prayed
for another adjournment and the proceedings were deferred to 13.04.2024.
The reply came to be filed on 13.04.2024, whereafter, on 15.04.2024, the
AO passed an order under Section 148A(d) and simultaneously issued a
notice under Section 148 of the Act of 1961.
17. The scheme of Section 148A and the principles of natural justice
enjoins upon the AO to grant reasonable opportunity of hearing to the
assessee and to pass an order under Section 148(d) before issuance of notice
under Section 148.
18. The proceedings under Section 148A of the Act of 1961 in the present
case were undeniably initiated well within limitation on 21.03.2024. The
delay occurred because the petitioner sought adjournments. The AO, acting
bonafidely and in compliance with principles of natural justice, granted
reasonable opportunity to the petitioner to file its reply. But equity has no
role to play, when it comes to the issue of bar of limitation, hence, the AO
cannot invoke any sympathy for being just.
Signature Not Verified
Digitally Signed
By:NAVEEN KUMAR
Signing Date:11.03.2026
15:43:06
W.P.(C) 19738/2025 & W.P.(C) 19769/2025 Page 10 of 14

19. Nevertheless, this Court finds that the notice dated 15.04.2024 is not
barred by limitation in face of the first proviso to Section 149(1) of the
Income Tax Act, 1961, which clearly postulates that for assessment years
beginning on or before 01.04.2021, a notice under Section 148 can be issued
only if, on the relevant date, the proceedings had not already become time
barred under the old law as it stood prior to the Finance Act, 2021. In the
present case, the reassessment proceedings were initiated on 21.03.2024 by
issuance of notice under Section 148A(b), which was within the prescribed
period of six years for AY 2017–18, i.e., before 31.03.2024.
20. Therefore, on that date, the Assessing Officer had the jurisdiction to
proceed under the unamended provisions. The subsequent notice under
Section 148 came to be issued on 15.04.2024, after following the mandatory
procedure under Section 148A and after considering the reply filed by the
petitioner. The time taken in this process, including adjournment(s) sought
by the petitioner, does not render the proceedings time barred.
21. The fifth proviso to Section 149(1) of the Act of 1961, as was in
vogue at the relevant time, provides for exclusion/extension of time where
proceedings are pending and opportunity has been granted to the assessee.
22. Thus, it cannot be said that the notice could not have been issued
under the old law due to expiry of limitation. The bar contained in the
proviso to Section 149(1) is, therefore, not attracted, and the impugned
notice cannot be held to be without jurisdiction on the ground of limitation.
23. Though Fifth Proviso to Section 149 (1) of the Act of 1961, squarely
covers the case of the respondents, and even if there is a possibility of
another view, it can be safely held that the Assessing Officer can bona fide
form an opinion that the time allowed for filing reply would extend the
Signature Not Verified
Digitally Signed
By:NAVEEN KUMAR
Signing Date:11.03.2026
15:43:06
W.P.(C) 19738/2025 & W.P.(C) 19769/2025 Page 11 of 14

period of limitation or will entail exclusion of the time granted under
Section 148A(b).
24. The Assessing Officer, having granted adjournments in order to
adhere to the principles of natural justice on the basis of bona-fide
construction of the Fifth Proviso, cannot be said to have acted in defiance of
the prescribed period of limitation.
25. That apart, indulgence was granted and repeatedly extended at the
request of the petitioner. The petitioner wilfully availed such benefit and
filed its reply on 13.04.2024, that too without raising any objection at that
stage alleging that issuance of notice beyond 31.03.2024 is beyond
limitation. The plea of limitation has been raised only after the notice dated
15.04.2024 was issued, that too in the present writ proceedings.
26. If petitioner’s contention is accepted, then in each case when initial
notice under Section 148A has been issued wherein limitation, the AO
apprehending that the limitation period might end, would refuse to grant
sufficient time to file reply and pass order under Section 148A(C) in a haste.
This would defeat the purpose of Section 148A, which is meant to give
assessee a fair opportunity to defend its case.
27. The petitioner’s reliance on the decision in Manju Somani (supra) of
this Court is misplaced. In that case, the notice was issued beyond the
limitation period without any delay being caused by the assessee and the
statutory exclusion was neither applicable nor was the same pleaded by the
respondents. The facts of the present case are quite different. The
proceedings under Section 148A of the Act of 1961 were initiated within
time, and the delay occurred only because the petitioner’s own requests for
adjournments. Therefore, the benefit of exclusion under the proviso to
Signature Not Verified
Digitally Signed
By:NAVEEN KUMAR
Signing Date:11.03.2026
15:43:06
W.P.(C) 19738/2025 & W.P.(C) 19769/2025 Page 12 of 14

Section 149(1) has to be given in accordance with law. The judgment in
Manju Somani (supra) does not apply to the facts of the present case.
28. The petitioner’s reliance on the decision of Shree Cement Ltd. vs.
Assistant Commissioner of Income Tax, Central Circle and Ors. in
W.P.No. 10540/2024 is also misplaced. In that case, the notice under
Section 148A(b) was issued on 31.03.2024, and the final notice under
Section 148 was issued on 01.05.2024. This shows that the proceedings
were started at the very last moment before the limitation period expired.
The Hon’ble Rajasthan High Court, was dealing with a situation where the
action was taken right at the verge of the time limit. There was hardly any
time left to elicit response under Section 148A(b) and pass order under
Section 148A(c) of the Act. In contrast, in the present case, the proceedings
were started well before the limitation period ended. The applicability of
fifth proviso was neither claimed nor dealt with. Hence, aforesaid decision
of Rajasthan High Court is clearly distinguishable.
29. In view of the foregoing discussion, the Court is of the considered
view that the Assessing Officer acted within jurisdiction and that the period
consumed in granting opportunity under Section 148A(b) stands excluded as
per the Fifth Proviso to Section 149 of the Act of 1961.
30. The period between 28.03.2024 and 15.04.2024, during which the
matter remained pending on account of adjournments sought by the
petitioner, is liable to be excluded in terms of the statutory proviso.
Consequently, the notice dated 15.04.2024 cannot be held to be barred by
limitation.
31. We are of the view that the impugned notice under Section 148 of the
Act of 1961 has been validly issued on 15.04.2024 and the same is within
Signature Not Verified
Digitally Signed
By:NAVEEN KUMAR
Signing Date:11.03.2026
15:43:06
W.P.(C) 19738/2025 & W.P.(C) 19769/2025 Page 13 of 14

limitation. No jurisdictional error is made out.
32. Both the writ petitions are, therefore, dismissed along with all pending
applications.


DINESH MEHTA
(JUDGE)

VINOD KUMAR
(JUDGE)
FEBRUARY 26, 2026/ sr



Signature Not Verified
Digitally Signed
By:NAVEEN KUMAR
Signing Date:11.03.2026
15:43:06
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