Loading judgment…
Facts
The assessee challenged the reopening of assessment under Section 148 for AY 2016-17, arguing it was time-barred as per Section 149(1)(b) of the Act. The notice under Section 148 was issued on 29/07/2022, beyond three years, and the escaped income was less than Rs. 50 lakhs.
Held
The Tribunal held that the notice issued under Section 148 was in clear violation of Section 149 of the Act and quashed the proceedings as bad in law. Other grounds were not adjudicated upon as the primary legal ground led to quashing.
Key Issues
Whether the reopening of assessment under Section 148 was valid when initiated beyond three years and the escaped income was below Rs. 50 lakhs, as per Section 149 of the Act.
Sections Cited
148, 149, 149(1)(b), 10(38), 147, 144B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
Before: SHRI SANDEEP GOSAIN
This appeal filed by the assessee is arising out of the order of the Learned National Faceless Appeal Centre (NFAC) [hereafter, Ld.CIT(A)], dated 6/02/2025 for the assessment year 20167-17. 2. The grounds of appeal raised by assessee are as follows:-
“1. On the facts and circumstances of the case in law, Ld. CIT(A) erred in confirming in reopening the case under section 148 of the Act which is bad in law as it is time barred as per section 149(1) (b) of the Act
2 ITA 2848/Mum/2025 Mukesh Kumar Mardia 2. On the facts and circumstances of the case in law, Ld. CIT(A) erred in confirming stand of A.O. for not proving evidence and materials which are used against me.
On the facts and circumstances of the case in law, Ld. CIT(A) erred in confirming stand of A.O. for not allowing long term capital gain of Rs. 34,85,400 as exempt u/s 10(38) of the IT A Act.
4. The assessee craves leave to add, alter or amend the existing grounds of appeal on or before the date of hearing.”
3. At the very outset, the Ld.AR has pressed ground 1 which is legal in nature, wherein assessee has challenged the proceedings under section 148 as bad in law, being time barred, as per section 149 of the I.T. Act.
I have heard the arguments of both the counsels, perused the materials placed on record, judgements cited before me and also the order passed by the revenue authorities.
From the records I notice that in the present case, notice under section 148 was issued on 29/07/2022, i.e. beyond 3 years and the escaped income as has been reported was less than R.50 lakhs. Therefore, the ratio of judgement in the case of Acropolis Realty (P.) Ltd vs Income-tax Officer reported in (2024) 168 taxmann.com 406 (Delhi) is squarely applicable, wherein it has been held that where income in respect of which the Assessing Officer had information to suggest that it had escaped assessment, was below threshold limit of Rs.50 lakhs, re-assessment proceedings could not have been initiated beyond the period of 3 years from the end of relevant assessment year. Further, the co-ordinate bench of ITAT, Mumbai Bench “A”, in the case of Amrit Corporation vs DCIT, CC-1(1), Mumbai in & 1657/Mum/2025, order dated 18/06/2025 has also decided on the same lines.
3 ITA 2848/Mum/2025 Mukesh Kumar Mardia 6. Therefore, considering the totality of facts and circumstances of the present case, I am of the view that the impugned notice issued under section 148 of the Act is in clear violation of provisions of section 149 of the Act. Therefore, the entire proceedings initiated on the basis of the impugned notice are bad in law and, therefore, I quash the same. Since I have quashed the assessment under section 147 read with action 144B of the Act on the legal ground itself, therefore, other grounds raised by the assessee are not being adjudicated upon and are left open. Consequently, the appeal filed by the assessee is partly allowed.
7. In the result, the appeal filed by the assesee is partly allowed.