S.148 Notice Cannot Be Treated as Issued Within Limitation Merely Because It Bore an Earlier Date: ITAT [Read Order]
ITAT held that reassessment proceedings would be barred by limitation where notice under Section 148 of the Income Tax Act was signed and served beyond the prescribed period despite bearing an earlier date
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The Income Tax Appellate Tribunal (ITAT), Mumbai Bench, quashed reassessment proceedings initiated under Section 147 of the Income Tax Act after finding that notice issued under Section 148 of the Act had actually been issued after expiry of limitation. The assessee,Pradeep Shyamlal Sayani, an individual, had filed return of income for Assessment Year 2017-18 declaring total...
The Income Tax Appellate Tribunal (ITAT), Mumbai Bench, quashed reassessment proceedings initiated under Section 147 of the Income Tax Act after finding that notice issued under Section 148 of the Act had actually been issued after expiry of limitation.
The assessee,Pradeep Shyamlal Sayani, an individual, had filed return of income for Assessment Year 2017-18 declaring total income of Rs.5.82 lakh. Based on information regarding deposits of Rs.1.46 crore in various bank accounts, reassessment proceedings were initiated under Section 147 of the Income Tax Act
The AO issued notice under Section 148 of the Act dated 31.03.2021 and subsequently framed reassessment by making addition of Rs.52.66 lakh towards unexplained deposits in bank accounts of the assessee.
The CIT(A) rejected the assessee’s contention that the notice issued under Section 148 of the Act was barred by limitation and upheld the reassessment proceedings.
Aggrieved, the assessee preferred an appeal before the Tribunal.
Before the Tribunal, the assessee contended that although the notice under Section 148 of the Act was dated 31.03.2021, the same had actually been signed and served only on 07.04.2021 and was therefore barred by limitation. The assessee relied upon decisions of the Telangana High Court in Kalyan Chillara v. DCIT and Anantha Reddy Pannala v. DCIT as well as the Gujarat High Court in Saumil Avinash Baheti v. ITO.
However, the Revenue contended that the notice had been generated within time on 31.03.2021 and that delay in online processing resulted in service upon the assessee on 07.04.2021.
The Tribunal comprising Anikesh Banerjee (Judicial Member) and Makarand Vasant Mahadeokar (Accountant Member) observed that there was an admitted factual position that both signing and service of notice under Section 148 of the Act had taken place only on 07.04.2021, beyond the limitation period ending on 31.03.2021.
The Tribunal further observed that with effect from 01.04.2021, amended reassessment provisions including Section 148A of the Act had come into force and therefore reassessment proceedings initiated on 07.04.2021 ought to have been initiated in accordance with the amended provisions.
Accordingly, the Tribunal held that the notice issued under Section 148 of the Act was without jurisdiction and barred by limitation and consequently quashed the reassessment proceedings initiated under Section 147 read with Section 144B of the Act.
The assessee’s appeal was allowed.
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