The Calcutta High Court has stayed reassessment proceedings initiated by the Income Tax Department, raising a crucial question on the computation of the limitation period under the Income Tax Act, 1961.
The bench of Justice Kausik Chanda has observed that the notice dated August 30, 2024, sought to reopen assessment for the Assessment Year 2014–15. If the limitation is computed from the notice date, the reassessment proceedings appear, at first glance, to be time-barred.
The dispute arises from a search conducted on June 21, 2022, where the petitioners were categorized as “other persons” under Section 153C of the Income Tax Act. Under the amended provisions of Section 149, reassessment proceedings can be initiated within a period of up to ten years in certain cases.
However, the central issue before the Court was the determination of the starting point for calculating this ten-year limitation period.
The Court examined whether the limitation period should be reckoned from the date on which seized documents were handed over by the Search Authority to the jurisdictional Assessing Officer, or the date of issuance of notice under Section 148A.
Relying prima facie on the ruling in Dinesh Jindal vs. Assistant Commissioner of Income Tax (2024), the Court observed that the relevant date appears to be the date of issuance of the notice under Section 148A.
The Court granted interim protection to the petitioners by staying the operation of the impugned Section 148A notices for a period of eight weeks; directing the Income Tax Department to file an affidavit-in-opposition within four weeks; and allowing the petitioners to file a reply within one week thereafter.
The matter is scheduled to be listed again after six weeks for further consideration.
Case Details
Case Title: Samrradhi Investment Company Private Limited -Vs- The Income Tax Officer, Ward, 5(1), Kolkata and Ors.
Case No.: WPA 2408 of 2025
Date: 25.03.2026
Counsel For Petitioner: Abhratosh Majumder, Sr. Adv.
Counsel For Respondent: Aryak Dutt
