Notice u/s 148 Invalid due to Expired Limitation Period: ITAT [Read Order]

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT), held that the notice issued under Section 148 of the Income Tax Act, 1961, to the assessee for the assessment year (AY) 2015-16 was invalid due to the expiration of the limitation period. 

Coming to the facts of this case, the revenue issued a notice under Section 148 of the Income Tax Act on 27-7-2022, seeking to reopen the assessment for AY 2015-16. The revenue had initially raised concerns about alleged fictitious losses claimed by the assessee through transactions with M/s. Goodluck Securities and M/s. APAR Finance Ltd., totaling Rs. 2,18,15,772. The revenue contended that these losses were artificially created through manipulated trades in equity derivatives, based on information received from the Investigation Wing. The Assessing Officer (AO) had disallowed these losses.

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The assessee, who was aggrieved by the decision of the AO, appealed before the CIT(A) for relief. Dissatisfied with the order passed by the CIT(A), the revenue appealed before the ITAT, and the assessee filed a cross-objection. 

Before the ITAT it was contended by the assessee’s counsel that the entire re-assessment proceedings under Section 148 of the Income Tax Act, 1961, were time-barred and thus invalid.

ITAT observed that “In the case of assessee, the period of six years had expired on 31/03/2022 and consequently, the notice dated 27/07/2022 is clearly barred by limitation, and on this ground, the assessment proceedings u/s.147 is hereby quashed. Accordingly, the cross objection filed by the assessee is allowed and all the grounds raised by the Revenue are dismissed as infructuous.“

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The ITAT reached the conclusion that it was a clear case that was barred by limitation, as the period of 6 months had expired on 31/03/2022 and the notice dated 27/07/2022 was clearly barred by limitation, and the assessment proceedings under Section 147 of the Income Tax Act were quashed.

The bench comprising Girish Agarwal (Accountant Member) and Amit Shukla (Judicial Member) dismissed the appeal filed by the revenue as infructuous and allowed the cross-objection filed by the assessee. 

To Read the full text of the Order CLICK HERE

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