The Gujarat High Court has held that the reassessment notice issued after a lapse of six years is not valid and quashed the notice under section 148 of the Income Tax Act, 1961.
Shree DurgasyntexPrivate Limited, the petitioner challenged the notice dated 28.07.2022 issued by the respondent-assessing officer under Section 148 of the Income Tax Act, 1961 seeking to reopen the assessment in respect of the assessment year 2014-15. Also challenged is the order dated 28.07.2022 passed under Section 148A(d) of the Income Tax Act, 1961 ( “the Act”).
While in the impugned order under section 148A(d) of the Act mentioned are the factual details and the reasons based on which the assessing officer has found that the case is fit to be reopened for the assessment in respect of the year under consideration.
It was stated that the notice under section 148 of the Act was originally issued on 21.04.2021 for the assessment year 2014-15. The said notice was treated as a show-cause notice under section 148A(b) of the Act in light of the decision of the Supreme Court in Union of India vs. Ashish Agarwal[(2023) and the order under section 148A(d) was passed.
The petitioner submitted that the notice issued under section 148 of the Act and the consequential order under section 148A(d) of the Act issued by the department for the assessment year 2014-15 is barred on the ground of limitation, the notice having been issued after passage of six years from the end of the relevant assessment year.
Section 147 of the Act empowers the assessing officer to reassess the income of the assessee subject to the provisions of Sections 148 to 151 of the Act in case any income chargeable to tax has escaped assessment.
It was evident that Section 149 as it stood immediately before the commencement of the Finance Act, 2021, that is before 01.04.2021 in the old regime inter alia provided for the time limit for notice. It stated inter alia that no notice under section 148 shall be issued for the relevant assessment year, as per clause (b), if four years, but not more than six years, have elapsed from the end of the relevant assessment year unless the income chargeable to tax, which has escaped assessment, amounts to or is likely to amount to one lakh rupees or more for that year.
A Coram comprising Justice N V Anjaria and Justice Niral R Mehta observed that the impugned notice under section 148 of the Act is beyond the permissible time limit, therefore, liable to be treated as illegal and without jurisdiction.
Notice dated 28.07.2022 issued by Respondent-Assessing Officer under Section 148 of the Income Tax Act, 1961, seeking to reopen the assessment in respect of Assessment Year 2014-15, Order dated 28.07.2022 passed by the Respondent under Section 148A(d) of the Act are quashed and set aside by the Court.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to TaxscanAdFree. Follow us on Telegram for quick updates.
