Initiation of Reassessment processing beyond six years of Assessment is barred by limitation: Calcutta HC [Read Order]

The High Court of Calcutta held that initiation of reassessment processing beyond six years of assessment is barred by limitation and directed the respondent to file a reply to the petition.

Laser Vanijya LLP Vs., the petitioner has challenged the impugned order dated 28th July 2022 under Section 148A(d) of the Income Tax Act, 1961 relating to the assessment year 2014-2015 based on the impugned notice dated  30th July 2021 under Section 148 of the Income Tax Act, 1961, mainly on the ground of jurisdiction of the assessing officer in the issuance of the impugned notice under Section148 of the Act being barred by limitation under Section 149(1)(b) of the Income Tax Act, 1961.

The assessing officer has tried to justify the initiation of the re-assessment proceeding by relying on instruction No.01/2022 dated 11th May 2022 issued by CBDT. It was evident that the issuance of notice and initiation of re-assessment proceedings are beyond six years and,  prima facie,  it was barred by limitation both under the old Act as well as under newly amended provision relating to Section 147 of the Act.

As per section 49 of the Income Tax Act, 1961, the time limit for issuance of notice for reopening of the assessment could be beyond four years, but within six years from the end of the relevant assessment year in case the amount escaped the assessment is likely to exceed rupees one lakh.

A Single bench comprising Justice Md. Nizamuddin viewed that the matter deserves adjudication by calling for affidavits from the respondents and held that the petitioner has been able to make out a prima facie case for an interim order by raising the issue of jurisdiction of the assessing officer concerned in initiating the impugned re-assessment proceeding.

The Court directed the respondents to file an affidavit in opposition within four weeks and the petitioner to file a reply thereto, if any, within two weeks thereafter.

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