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Facts
The assessee challenged the reassessment proceedings initiated under Section 147 of the Income Tax Act for AY 2016-17 and 2017-18. The primary ground of challenge was that the notice issued under Section 148 was barred by limitation.
Held
The Tribunal held that the notices issued under Section 148 of the Act were barred by limitation as they were issued beyond the surviving period as per the amended provisions of Section 149 of the Act, given the escapement of income was below Rs 50 lakhs.
Key Issues
Whether the notices issued under Section 148 of the Income Tax Act for reassessment were barred by limitation as per the amended Section 149 of the Act, considering the amount of income escaping assessment.
Sections Cited
147, 144C, 148, 149, 143(3)
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Income Tax Appellate Tribunal, DELHI BENCH “D”: NEW DELHI
Before: SHRI M. BALAGANESH & SHRI VIMAL KUMAR
O R D E R PER M. BALAGANESH, A. M.: 1. The Assessee LL Global Inc. (hereinafter referred to as ‘assessee) by filing the present appeal sought to set aside the impugned order dated 26.03.2024 for AY 2016-17 and 2017-18 passed by the Assessing Officer (AO) under section 147 r.w.s. 144C of the Income Tax Act, 1961 (for short ‘the Act’) inconsonance with the order passed by the Dispute Resolution Panel (DRP)-2, New Delhi dated 28.02.2024 u/s 144C(5). Identical issues are involved in both these appeals and hence they are taken up together and disposed of by this common order for the sake of convenience.
Ground No. 17 raised by the assessee is challenging the validity of assumption of jurisdiction u/s 147 of the Act, wherein, it has been pleaded that the notice u/s 148 of the Act is barred by limitation. Apart from this, the assessee had raised several legal grounds vide Grounds 2 to 11 challenging the validity of assumption of jurisdiction u/s 147 of the Act on various facets.
We have heard the rival submissions and perused the material available on record. The assessee company situated in Windsor Connecticut, USA is a company providing services by way of offering LOMA (Course Enrollment) and LIMRA offerings. LOMA courses are self-paced courses for the employees of the purchasing company whereas LIMRA offerings provide reward and recognition professional development programs that offer customers the ability to formally recognize their top performers with differing levels of certification, thereby achieving master levels of industry knowledge. The validity of assumption of jurisdiction under Section 147 of the Act is primarily challenged by the assessee for both the years under consideration. The Learned AO had quantified the escapement of income for Assessment year 2016-17 at Rs. 4,10,200 and for Assessment year 2017-18 at Rs. 3,17,776 being the membership fee received from Genpact India Pvt Ltd. Accordingly, the notice under Section 148 of the Act stood issued to the assessee for both the years under consideration. It was pleaded by the ld AR that the notice u/s 148 of the Act issued on 29-7-2022 are barred by limitation as it was issued beyond the surviving period as per the law laid down by the Hon’ble Supreme Court in the case of Rajeev Bansal reported in 469 ITR 46 (SC). The ld AR also submitted that the escapement of income for both the years under consideration is less than Rs 50 lakhs even according to the ld AO while recording the reasons.
Admittedly the 1st notice u/s 148 of the Act dated 25-6-2021 has been issued beyond the period of 3 years from the end of the relevant assessment year. Hence as per the amended provisions of section 149 of the Act, notice u/s 148 of the Act could be issued only if the income escaping assessment is more than Rs 50 lakhs. In the instant case, as stated earlier, the income escaping assessment is only Rs 4,10,200 for Assessment Year 2016-17 and Rs 3,17,776/- for Assessment Year 2017-18. Hence no notice u/s 148 of the Act could be issued by the ld AO as per the amended provisions of section 149(1)(b) of the Act to the assessee herein. Accordingly, the assumption of jurisdiction u/s 147 of the Act is flawed and hence the reassessment proceedings are hereby quashed.
Since the reassessment proceedings are quashed for both the years on the aforesaid single legal issue, the adjudication of various other legal facets raised by the ld AR at the time of hearing and in the grounds of appeal become academic in nature and they are left open. The adjudication of grounds raised by the assessee on merits are also hereby left open.
In the result, both the appeals of the assessee are allowed.
Order pronounced in the open court on 15/12/2025.