Loading judgment…
Facts
The assessee filed an appeal against the order of the National Faceless Appeal Centre. The primary issue revolved around the validity of the notice issued under Section 148 of the Income Tax Act for the assessment year 2015-16. The assessee contended that the notice was issued and dispatched beyond the prescribed time limits and that the reopening was also barred by limitation under the extended period provided by TOLA, 2021. Additionally, the assessee argued that the reopening after four years was not in consonance with the proviso to Section 147 of the Act.
Held
The Tribunal held that the notice under Section 148 of the Act was dispatched after the due date, rendering it barred by limitation. Furthermore, the reopening for AY 2015-16 was found to be impermissible in the extended period as per TOLA, 2021. The Tribunal also noted that the reopening after four years did not satisfy the conditions stipulated in the proviso to Section 147 of the Act. Consequently, the reopening of assessment was quashed.
Key Issues
Whether the notice under Section 148 for AY 2015-16 was issued within the prescribed time and limitation period, and whether the reopening after four years satisfied the conditions under Section 147.
Sections Cited
148, 143(3), 147, 143(2)
AI-generated summary — verify with the full judgment below
Detected automatically from the text. The count shows how many other judgments on BharatTax rely on the same authority.
Income Tax Appellate Tribunal, “C” 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 25.06.2024 for the AY 2015-16.
At the time of hearing, the ld. Counsel for the assessee stated that the assessment framed by the ld. AO is hopelessly barred by the limitation as noticed u/s 148 of the Act was not issued within the prescribed time as provided under the Act, though this was not raised in the regular ground of appeals in the memorandum of appeals. The assessee has also challenged the re-opening on other grounds which were raised before ld CIT(A).
The ld. DR on the other hand submitted that the issue was not raised before any of the authorities below and therefore, may kindly be restored to the file of any of the authorities below for adjudication.
After hearing the rival contentions and perusing the material on record, we find that the assessee has raised an additional ground of appeal challenging the validity of the notice issued u/s 143(2) of the Act being in an invalid format and in our opinion the issued raised in the additional ground is a purely a legal issue qua which all the facts are available in the appeal folder and no further verification of facts are required from any quarter whatsoever. In our considered view the assessee is at liberty to raise any legal issue before any appellate authority for the first time even when the same has not been raised before the lower authorities. The case of the assessee is squarely covered by the decisions of the Apex court in the case of i) Jute Corporation of India Ltd. Vs CIT (supra) , ii) National Thermal Power Co. Ltd v. CIT (supra) and also by the decision of Hon’ble Calcutta
The ld. Counsel for the assessee submitted the notice u/s 148 of the Act was issued on 31.03.2021, a copy of which is available at page no. 2 of the Paper Book. The ld. Counsel for the assessee thereafter submitted that the said notice was not dispatched and served upon the assessee within the time limit prescribed under the Act. The ld. Counsel for the assessee submitted that the said notice is mandatorily required to be issued and served upon the assessee on or before 31st March, 2021. However, the same was dispatched on 1st April, 2021 at 3.28 A.M. The ld. AR prayed that the notice sent through e-mail on 04.02.2021 would be deemed to be issued on 01.04.2021 and accordingly, barred by limitation. The ld. AR submitted that all the consequential proceedings including the assessment framed by the AO is bad in law and may kindly be quashed. The ld. AR in defense of his argument relied on the decision of Hon'ble Calcutta High Court in case of Marudhar Vintrade Private Limited vs. Union of India & Ors. in WPA No. 4382 of 2022. The ld. Counsel for the assessee submitted that the Hon'ble Jurisdictional High Court has decided the similar issue in favor of the assessee where the notice was uploaded for communication on 1st April, 2021 at 3 am.
The second plea taken by the assessee is that the assessment year 2015-16 is barred by limitation as the notice u/s 148 of the Act cannot be issued within the extended period as provided under The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions Act) (TOLA) 2021. The ld. Counsel for the assessee relied on the decision of Apex court in the case of Union of India & Ors. Vs. Rajeev Bansal vide order dated 03.10.2024 in civil appeal no. 8629 of 2024, wherein
The third plea raised by the counsel of the assessee was that the reopening of assessment was bad in law as the same was made after period of four years from the end of the relevant assessment without satisfying the conditions as provided in proviso to section 148 of the Act. The ld. Counsel for the assessee submitted that the assessment u/s 143(3) of the Act was framed in this case vide order dated 26.12.2017 passed u/s 143(3) of the Act and therefore, the reopening of assessment could have been made subject to the satisfaction of conditions as provided in the proviso to Section 147 of the Act. Therefore, the reopening of assessment which is not in consonance with the said proviso to Section 147 of the Act is bad in law. In defense of his argument the ld. Counsel for the assessee relied on the decision of ACIT Vs. CEAT Ltd. reported in [2022] 449 ITR 171 (SC). On this count, the assessment may be quashed.
On the other hand, the ld. DR relied on the orders of the ld. lower authorities by submitting that the notice was sent before 12 P.M. and therefore, the plea of the assessee is not valid as to notice being barred by limitation.
So far as the second peal is concerned for A.Y. 2015-16, is barred by limitation, in our opinion the extended period for issuing notice u/s 148 of the Act is not available and therefore, the proceedings are barred by limitation even on this count the proceedings as well as consequential assessment has to be quashed. The case of the assessee find force from the decision of the Hon'ble Apex Court in the case of Union of India & Ors. Vs. Rajeev Bansal vide order dated 03.10.2024 in civil appeal no. 8629 of 2024, wherein it has been held that the reopening for A.Y. 2015-16 is not permissible in the extended period as per TOLA on and form 01.04.2021 and therefore the assessment order for A.Y. 2015-16 is barred by limitation.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 25.03.2025