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Facts
The assessee's appeal was filed with a delay of 496 days, attributed to the COVID-19 pandemic and disruption in email services. The case involves reassessment proceedings initiated under Section 147 of the Income Tax Act, 1961, based on information regarding routed funds. The assessee's original return declared income of ₹4,850, but the reopening led to an addition of ₹16,46,00,000/- as undisclosed income.
Held
The Tribunal condoned the delay in filing the appeal. It was held that the notice issued under Section 148 of the Act was barred by limitation as it was served beyond the period prescribed under Section 149(1)(b) of the Act, making it invalid and void ab initio.
Key Issues
Whether the notice issued under Section 148 for reassessment was barred by limitation, rendering it invalid. Whether the delay in filing the appeal should be condoned.
Sections Cited
147, 148, 149, 143(1), 149(1)(b), 144
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Income Tax Appellate Tribunal, “A” BENCH, KOLKATA
This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 15.06.2023 for the AY 2011-12.
At the outset, we observe on the basis of records before us that the appeal of the assessee is barred by limitation of 496 days, for which the assessee has filed the condonation petition along with affidavit through Shri Dipesh P. Pala, Director. It was stated that the reasons for the delay in filing the appeal were beyond the control of the assessee as there was complete disruption in the office and operation of the assessee due to Covid-19 pandemic. It was also submitted that
The ld. DR on the other hand opposed the condonation of delay on the ground that no plausible reasons were presented for the delay.
We find that the reasons for delay in filing the appeal was stated to be on account of disruption of operation of the assessee due to Covid-19 pandemic and its aftermath. We also note that the assessee did not receive any communication from the ld. CIT (A) due to malfunctioning of the email accounts in Sify and Rediff mail. In our opinion, the assessee cannot be denied the substantial justice merely on technical ground as has been held by the Hon’ble Apex court in the case of Improvement Trust vs. Ujagar Singh & Ors. [2010] 6SCC 786 (SC) and Collector, Land Acquisition vs. Mst. Katiji [1987] 1987 taxmann.com 1072 (SC).Considering all these facts and the ratio laid down in the above decision, we are inclined to condone the delay and admit the appeal for adjudication.
The issue raised in grounds no. 1 is a technical and legal issue and is against the notice u/s 148 of the Act dated 31.03.2018 which was served on the assessee on 11.04.2018 beyond the prescribed time limit u/s 149 of the Act thereby rendering the notice itself barred by limitation and as invalid and void ab initio with all consequent proceedings including the reassessment proceeding as invalid and nullity.
In the appellate proceedings, again the assessee was non-compliant and the ld. CIT (A) affirmed the assessment order in absence of any submission or documentary evidences being furnished by the assessee in the appellate proceedings.
The ld. AR vehemently submitted before the Bench that the notice issued u/s 148 of the Act dated 31.03.2018 is hopelessly barred by limitation as the same was served upon the assessee on 11.04.2018 which was apparently beyond the time limit prescribed u/s 149 of the
The ld. DR on the other hand strongly opposed to the arguments of the assessee by submitting that the notice was issued on 31.03.2018 was also served upon the assessee by referring to the page no. 2 of the assessment order, wherein it was mentioned by the ld. AO on page no.2 that notice was issued u/s 148 of the Act dated 31.03.2018, which was duly served upon the assessee. The ld. DR also prayed before the Bench that one day time may be allowed so that the date of service of notice issued u/s 148 of he Act on the assessee could be verified from the assessment record and accordingly, the case was adjourned to the next date and fixed the date on 17.03.2025 and during the time of hearing, the ld. DR could not controvert the fact that the notice u/s 148 of the Act was served within the statutory time limit. The ld. DR referred to the provisions of Section 149(1)(b) of the
After hearing the rival contentions and perusing the materials available on record, we find that the assessment of the assessee was reopened u/s 147 of the Act after the AO received information from the ITO, Investigation Unit-1, Kolkata to the effect that the assessee was a beneficiary of accommodation entries which has escaped assessment. Accordingly, the notice u/s 148 of the Act was issued on 31.03.2018. The ld. AR placed before the Bench a copy of email received from the department that notice was served on the assessee on 11.04.2018. The ld. DR despite being given specific opportunity to prove the service of notice within the time limit as prescribed u/s 149(1)(b) of the Act could not prove that the same was issued within the time limit as prescribed hereinabove. The case of the assessee is squarely covered by the decision of jurisdictional High Court in the case of Marudhar Vintrade Pvt Ltd Vs Union of India in WPA No. 4382 of 2022 dated 12.4.2022. Therefore, we are inclined to treat the notice issued u/s 148 of the Act, as being barred by limitation within the meaning of Section 149(1)(b) of the Act. Considering these facts of the case in the light of above decision, we are inclined to quash the notice issued u/s 148 of the Act and also the consequent assessment framed. The appeal of the assessee is allowed on legal ground.
Since, we have allowed the appeal of the assessee on legal issue, the other ground raised are not being adjudicated at this stage and are
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 09.10.2025.