Court Blocks Late Tax Rechecks, 3-Year Rule Applies to All; Taxpayers Get Relief

New Delhi: In a major relief to taxpayers, the Delhi High Court has said that income tax cases cannot be reopened after three years. This rule will apply whether the case is under the old reassessment system or the new one that started in April 2021.

The Case Involved NCP

This ruling came during a case involving the Nationalist Congress Party (NCP). The tax department had sent a notice to reopen the NCP’s 2015–16 tax return. But the court cancelled it, saying it was sent too late.

What the Law Says

The court looked at the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 — also called TOLA. This law gave more time in some cases due to COVID-19, but it did not change the three-year limit for reopening tax cases.

Supreme Court Support

The High Court also referred to a 2024 ruling by the Supreme Court in the case Union of India vs Rajeev Bansal. In that case, the government agreed that any reassessment notice for older years (before 2016–17), sent after April 1, 2021, is not valid if it crosses the legal time limit.

Earlier Makemytrip Case Cited

The court also recalled its earlier decision in the Makemytrip case, where it had already ruled that old tax cases can’t be reopened after the three-year limit. This shows courts are being consistent in protecting taxpayers.

What This Means for You

More certainty: After three years from filing your tax return, you can feel safe from unexpected notices.

Stronger protection: If you receive a notice after three years, you can now challenge it easily.

Same rule for both systems: This applies to both the old and new reassessment rules.