The Rajasthan High Court (HC) stayed the time barred reassessment proceedings. The bench of Justice Rajendra Prakash Soni and Justice Sanjay Mehta observed that the income limit did not meet.
It was observed that in order to initiate the reassessment proceedings which are time barred, then it should meet the income limit as mentioned in the section 149 of the Income Tax Act, 1961.
According to section 149, if three years, but no longer than ten, have passed since the end of the relevant assessment year, unless the Assessing Officer (AO) has in his possession books of account or other documents or evidence that show the income subject to tax, represented in the form of an asset, which has escaped assessment amounts to or is likely to amount to INR 50 lakhs or more for that year.
In the instant case, it was submitted by the Counsel for petitioner, Vedant Agarwal that the amount or the asset as less than 50 Lakhs and thus has no time barred reassessment proceedings shall be initiated.
Furthermore, that the instructions dated 11.05.2022 issued by the Central Board of Direct Taxes (CBDT) are ultra-vires the provision of Income Tax Act, 1961 and hence, the impugned proceedings are invalid.
The respondent was given 4 weeks to file their requested reply after the bench accepted their request. The court postponed the ensuing actions and notices against the petitioner in the interim.
Additionally, it should be emphasized that the responders are free to transfer a request for a vacation or extension of stay if they so choose.
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