Delay in Issuing S.143(2) Notice: ITAT quashes Income Tax Reassessment Order [Read Order]
The Tribunal set aside the reassessment citing an invalidly delayed Section 143(2) notice and noting that otherwise it would result in double taxation.
Reassessment - order - ITAT - Taxscan
Reassessment - order - ITAT - Taxscan
The bench of the Income Tax Appellate Tribunal, Raipur, quashed the reassessment order on procedural grounds, holding that the notice under Section 143(2) of the Income Tax Act, 1961 was issued beyond the prescribed time limit.
The case involved Peyusha Shukla, who had filed her return declaring income of ₹36,64,280. A survey conducted in the case of Green Wood Four Seasons Pvt. Ltd., where she was Managing Director, revealed that she had claimed a deduction of ₹3,05,19,169 under Section 54F in the Assessment Year (AY) 2015-16. The Assessing Officer (AO) reopened the case under Section 147 and made an addition of the same amount, holding that the deduction was wrongly claimed in the year of accrual.
The Commissioner of Income Tax (Appeals) [CIT(A)] deleted the addition, noting that the property was initially residential and converted to commercial use only in Financial Year 2017-18, and the assessee had already offered the gains to tax in AY 2018-19.
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Represented by R. B. Doshi, the Assessee argued that the reassessment was void since the mandatory notice under Section 143(2) was issued after the statutory deadline of three months from the end of the financial year in which the return was filed.
Represented by S. L. Anuragi, the Revenue contended that the notice was within permissible time and sought to defend the reassessment.
The Bench comprising of Judicial Member, Ravish Sood and Accountant Member, Arun Khodpia held that issuance of a valid and timely notice under Section 143(2) is a sine qua non for a valid reassessment. Since the notice in this case was issued on 20 November 2021, beyond the statutory cut-off of 30 June 2021, the assessment order dated 30 March 2022 stood vitiated.
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The Tribunal observed that allowing the Revenue’s stand would result in double taxation, as the assessee had already paid tax on the capital gains in Assessment Year 2018-19.
Therefore, the assessee’s appeal was allowed.
Accordingly, the reassessment order was quashed.
Consequently, the Revenue’s appeal was dismissed.
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