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Facts
The assessee filed an appeal challenging the order of the CIT(A) which confirmed the reopening of assessment for AY 2015-16. The assessee contended that the notice u/s 148 was issued beyond the prescribed limitation period.
Held
The Tribunal held that the notice u/s 148 was issued beyond the period of limitation prescribed under Section 149 read with its first proviso. Therefore, the reopening of the assessment was bad in law.
Key Issues
Whether the notice for reopening of assessment under Section 148 was issued within the prescribed limitation period as per Section 149 of the Income Tax Act, 1961.
Sections Cited
148, 149, 149(1)(b), 250, 69, 54 EC
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH MUMBAI
Before: HON’BLE BR BASKARANHON’BLE SHRI SANDEEP GOSAIN
Date of Hearing 04.03.2025 Date of Pronouncement 06.03.2025 आदेश / ORDER
PER SANDEEP GOSAIN, JM:
The present appeal has been filed by the assessee challenging the impugned order 16.08.2024 passed u/s 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre, Delhi / CIT(A) Mumbai, for the A.Y 2015-16. The assessee has raised the following grounds of appeal:
1) Ld. AO erred in re-opening the assessment.
Ld CIT(A) erred in confirming the action of Ld. AO of reopening the assessment ignoring the objections raised and 2 Ameya Balkrishna Kulkarni, Mumbai. submissions made during the course of first appellate proceedings.
The Ld CIT(A), NFAC, Delhi erred in confirming the action of the Ld AO of adding Rs. 45,000/- u/s 69.
4. The Ld CIT(A), NFAC, Delhi erred in confirming action of Ld. AO of disallowing exemption Rs. 10 lakhs u/s 54 EC despite appellant has made investment. The Appellant craves leave to add, amend, supplement, alter and/or delete any of the above Grounds of Appeal
.s
2. At the outset, Ld. AR stressed upon ground No. 1 raised by the assessee, thereby challenging the very reopening of the assessment as barred by limitation.
3. Since this ground is purely legal in question and goes to the roots of the case, therefore we have heard both the counsels on this ground and evaluated the facts placed on record.
From the records, we found that notice u/s 148 of the act was dated 29.04.2022 for the year under consideration i.e AY 2015–16. And section 149(1)(b) of the Act provided a time limit of six years from the end of the relevant assessment year for issuing notice u/s 148 of the Act. In the present case the relevant assessment year, being AY 2015–16, therefore sixth year expired on 31st March 2022. However, notice u/s 148 of the Act in the instant case was issued on 29.04.2022, i.e clearly beyond the period of limitation prescribed in section 149 read with the first 3 Ameya Balkrishna Kulkarni, Mumbai. proviso to the said section. Reliance in this regard is placed upon the decision of Hon’ble jurisdictional Bombay High Court in the case of Hexaware Technologies Ltd Vs ACIT (2024 ) 162, taxman.com, 225, where in it was held that “The first proviso to section 149 provides that no notice under section 148 shall be issued at any point of time in a case for a relevant assessment year beginning on or before the 1st day of April, 2021, if a notice under section 148 could not have been issued at that time on account of being beyond the time limit specified under the provision of clause (b) of sub-section (1) of this section, as it stood immediately before the commencement of the Finance Act, 2021. The term 'at that time' in the first proviso refers to the date on which notice under section 148 is to be issued by the Assessing Officer. The term 'at that time' has to refer to the term 'at any time' used earlier in the said proviso. The reference to 'at any time' is to the date of the notice to be issued by the Assessing Officer and, therefore, the term 'at that time' would also refer to the said date. On the said date, if a notice could not have been issued under the erstwhile provision of section 149(1)(b) for any assessment year beginning on or before the 1st day of April, 2021, the notice cannot be issued even under the new provisions. [Para 24] Section 149(1)(b) of the erstwhile provisions provided a time limit of six years from the end of the relevant assessment year for issuing notice under section 148. For the relevant 4 Ameya Balkrishna Kulkarni, Mumbai. assessment year, being assessment year 2015-2016, 6th year expired on 31st March, 2022. The notice under section 148, in the instant case, is issued on 27th August, 2022, ie., clearly beyond the period of limitation prescribed in section 149 read with the first proviso to the said section”.
Since Hon’ble High Court of Mumbai has dealt with the identical issue in the case of Hexaware Technologies Ltd, (Supra) whereas also the A.Y 2015–16 was in question and it was categorically held that sixth year expired on 31st March 2022, therefore any notice u/s 148 issued after the said date would be clearly beyond the period of limitation prescribed u/s 149 read with the first proviso to the said section.
Therefore taking into consideration the facts of the present case and also the decision of Hon’ble Bombay High Court in the case of Hexaware Technologies Ltd (supra) we hold that the notice u/s 148 in the instant case has been issued beyond the period of limitation. Therefore reopening of the assessment on the basis of impugned notice is bad in law and thus the same stands quashed. Consequently, ground No. 1 raised by the assessee stands allowed.
Since we have allowed ground No 1 and quashed the reopening of the assessment, therefore other grounds 5 Ameya Balkrishna Kulkarni, Mumbai. raised by the assessee needs no adjudication as the same become infructous in view of our finding on ground No.1.
In the result, the appeal filed by the assessee stands allowed.