Notice Issued Within Limitation Period Specified u/s 149(1)(c): ITAT Upholds Reassessment [Read Order]

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has upheld the reassessment order as the notice was issued within the limitation period specified under Section 149(1)(c) of the Income Tax Act.

The Appellant, Govindbhai Laljibhai Kakadia, filed original return of income for the Assessment Year 2006-07 declaring total income. Reassessment proceedings were started by invoking Sections 147, 148, read with Section 149(c) of the Income Tax Act after the Assessing Officer noticed that the Appellant had an asset located outside of India in relation to which income for the Assessment Year 2006–07 had escaped assessment.

No international bank accounts were owned by the appellant, the appellant said. The Investigation Wing informed the appellant that he or she was a beneficiary in three international bank accounts held with HSBC Bank, Geneva in light of the aforementioned response.

Sridhar Govind Menon, appeared on behalf of the revenue.

The two-member Bench of Prashant Maharishi, (Accountant Member) Rahul Chaudhary, (Judicial Member) found that the Assessing Officer had fresh tangible material to form a belief that the Appellant held a bank account located outside India with credit for the Assessment Year 2006-07 which was not disclosed to the income tax authorities.

Therefore, the deeming provisions contained in Explanation 2 to Section 147 of the Income Tax Act were attracted in the case of the Appellant.

Further, as per Section 149(1)(c) of the Income Tax Act the Assessing Officer had time till the lapse of 16 years from the end of the Assessment Year 2006-07 to issue notice under Section 148 of the Income Tax Act. Explanation to Section 149 of the Income Tax Act clarified that the provisions of Section 149(1) and 149(3) of the Income Tax Act, as amended by Finance Act, 2012 would also be applicable to any Assessment Year beginning on or before 01/04/2012.

The Bench dismissed the appeal filed by the assessee holding that the Assessing Officer was entitled to reopen an assessment for the Assessment Year 2006-07 as the jurisdictional requirements specified under Section 147 of the Income Tax Act were satisfied and the notice, dated 12/03/2014 - pursuant to which Assessment Order dated 25/03/2015 was passed, has been issued under Section 148 of the Income Tax Act within the limitation period specified under Section 149(1) of the Income Tax Act.

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