ITAT Sets Aside Reassessment Notice u/s 148 Issued Beyond Statutory Time Limit, says Proceedings against Zee Entertainment Invalid [Read Order]

The Mumbai Bench of the Income Tax AppellateTribunal (ITAT) quashed a reassessment notice issued under Section 148 of the Income Tax Act 1961 and held the entire proceedings to be unsustainable on the basis of limitations.

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The assessee Zee Entertainment Enterprises Ltd had filed its return of income for the Assessment Year (AY) 2015-16, which was later assessed under Section 143(3) of the Act. Subsequently, the original return of income for the relevant assessment year was reopened and a fresh notice under Section 148 of the Income Tax Act 1961 was served to the assessee on 29.07.2022 in accordance with the procedure prescribed under Section 148A of the Act.

The assessee had argued that the limitation period of six years, as provided by the old provisions of Section 149, had already expired on 31.03.2022. Relying on various judicial precedents, including a Supreme Court ruling in Union of India v. Rajeev Bansal, it was argued that reassessment notices issued after the expiry of limitation cannot be revived under the amended law.

The Revenue, on the other hand, was in favor of allowing the reassessment and relied on old reassessment provisions and judicial precedents.

The Tribunal held that since the reassessment notice was issued on 29.07.2022, after the expiry of the limitation period, it was not valid as the extended limitation period cannot revive old cases and hence, it was held to be invalid, and the reassessment proceedings were quashed.

The two-member bench consisting of Anikesh Banerjee [Judicial Member] and Arun Khodpia [Accountant Member],held that the reassessment proceedings must strictly adhere to the timelines prescribed by the statute only.

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