Notice Issued Post 01.04.2021 for AY 2015-16 is Barred by Limitation: ITAT Quashes Reassessment Order u/s 147 [Read Order]

The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench, held that notice issued by the Assessing Officer (AO) after 1.04.2021 for Assessment Year (AY) 2015-16 was barred by limitation under amended section 149 of the Income Tax act, 1961 and quashed the reassessment order passed under Section 147 of the Income Tax Act.

The appellant, Elegance Reality, a real estate entity, filed an appeal contending that Commissioner of Income Tax (Appeals) (CIT(A)) has erred in law and on facts in confirming action of jurisdictional AO issuing notice under section 148 dated 11.06.2021

The AO issued notice under section 148 of Income Tax Act on 11.06.2021, within the extended time period as per Taxation and Other laws (Relaxation of certain provisions) Ordinance, 2020 (TOLA) for AY 2015-16.

In pursuant of directions issued by the Hon’ble Supreme Court in the case of Union of India and Ors. Vs. Ashish Agrawal, (2022), a fresh notice was issued to the appellant on 29.07.2022 as per section 148 of the Income Tax Act.

Urvashi Shodhan, counsel for the appellant, contended that the Revenue could not have issued the notices under section 3(1) of TOLA considering the time period as prescribed under section 149 of the Income Tax Act on 01.04.2021.

The appellant counsel relied on the Supreme Court decision in case of Union of India vs. Rajeev Bansal, (2024), held that the reopening of assessment for A.Y. 2015-16 during the extended time period by TOLA between 01.04.2021 to 30.06.2021 was bad in law and barred by limitation.

Alpesh Parmar, the respondent counsel, agreed with the appellant council and was unable to point out any distinguishing facts before the tribunal.

Sanjay Garg, Judicial Member and Annapurna Gupta, Accountant member, observed that the issue was covered in favour of the appellant by the decision of the ITAT in case of Hindva Builders. As the notice issued under section 148 was barred by limitation, the reassessment proceedings were held to be invalid.

Accordingly, the Tribunal held that the reopening of assessment for AY 2015-16 was bad in law and quashed the reassessment order passed under section 147.

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