The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the income tax amendment to extend time limit for re-assessment is not applicable when notice was illegal.
The assessee, Anand Pershad Jaiswal is an individual and holding the status of Non-Resident Indian for the previous year relevant to Assessment Year 2000-01. The Assessing Officer found bank accounts in the name of the assessee and his father, with credit for the Assessment Year 2000-01. Consequent upon information, the Assessing Officer the Assessing Officer issued notice dated 29.03.2017 under Section 148 r.w. Section 147 of the Act and reopened the assessment. The reassessment order was passed dated 29.12.2017 on the basis of fresh material obtained concerning Assessment Year 2000-01. The additions were made towards credit entries reflected in the foreign bank accounts in the absence of any explanation thereof.
SM. Baranwal,on behalf of the revenue,contented that in view of Explanation inserted to S. 149 of the Income Tax Act1961, the extended time limit provided by clause (c) inserted by Finance Act 2012 would be automatically applied where income in relation to assets located outside India had found to be escaped regardless of other imputations. He further contended that the order of the CIT(A) proceeded on misconstruction of the limitation period provided under Section 149 of the Act.
Deep Chand Garg on behalf of the assessee contended that the time limit available to reopen the assessment was only 6 years (from the end of relevant assessment year AY 2000-01) under S.149(1)(b) of the Act which stood expired as per the bar of limitation existing as per extant law of S. 149 of the Act which was extended to 16 by the amendment.
It was further submitted that the time limit extended by clause (c) to S. 149(1) would apply only to a situation where the limitation period was subsisting and had not expired at the time of amendment brought by Finance Act, 2012.
Saktijit Dey (Judicial Member) and Shri Pradip Kumar Kedia (Accountant Member) dismissed the appeal holding that the notice issued under Section 149 was time barred and thus could not have been acted upon. Consequently, the impugned re-assessment order passed in consequence of the illegal notice under Section 148 is a nullity and bad in law. The Bench referred Hon’ble Supreme decision in S.S. Gadgil vs. Lal & Co. held that amended provisions would not reinstate the jurisdiction to reassess the return which was otherwise time-barred as per existing provisions for the relevant assessment year.
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