Validity of Section 148 Notices Upheld on Limitation: ITAT Allows KLM Steel Pipe’s Income Tax Appeal [Read Order]
The court viewed that the "clock" for the limitation period only resumed ticking after the Assessee filed its reply to the Section 148A(b) notices.
![Validity of Section 148 Notices Upheld on Limitation: ITAT Allows KLM Steel Pipe’s Income Tax Appeal [Read Order]](https://images.taxscan.in/h-upload/2026/05/05/2135517-validity-of-section-148-notices-upheld-on-limitationjpg.webp "Validity of Section 148 Notices Upheld on Limitation: ITAT Allows KLM Steel Pipe’s Income Tax Appeal [Read Order]")
The IncomeTax Appellate Tribunal (ITAT), Delhi Bench, has quashed the reassessment proceedings for KLM Steel Pipe Pvt. Ltd. for Assessment Years 2013-14 and 2014-15, holding that the notices issued under Section 148 of the Income-taxAct were barred by limitation, rendering the subsequent reassessment orders void ab initio. The Revenue had initiated reassessment proceedings by...
The IncomeTax Appellate Tribunal (ITAT), Delhi Bench, has quashed the reassessment proceedings for KLM Steel Pipe Pvt. Ltd. for Assessment Years 2013-14 and 2014-15, holding that the notices issued under Section 148 of the Income-taxAct were barred by limitation, rendering the subsequent reassessment orders void ab initio.
The Revenue had initiated reassessment proceedings by issuing notices under the old and new regimes. The primary issue before the Tribunal was whether the notices issued on July 27, 2022 (for AY 2013-14) and July 26, 2022 (for AY 2014-15) were valid within the prescribed limitation period.
The Assessee argued that the proceedings were time-barred. It was contended that the Assessing Officer (AO) had a limited "surviving time limit" left as of June 2021, and that this time limit was exceeded when the final notices were issued in July 2022 following the show cause replies.
The Coram of Anubhav Sharma (Judicial Member) and M. Balaganesh (Accountant Member) applied the legal principles established by the Supreme Court in the case of Union of India Vs. Rajeev Bansal. The Tribunal calculated the limitation timeline, noting that the "clock" for the limitation period only resumed ticking after the Assessee filed its reply to the Section 148A(b) notices. The available time remaining from the original deadline in June 2021 was merely a few days.
The Tribunal observed:
“In view of the observation of the Hon'ble Supreme Court in the case of Rajeev Bansal (supra), the extended due date for issuance of notice u/s 148 of the Act expired on 29.06.2022... and since the notice u/s 148 of the Act is issued on 27.07.2022, the said notice is to be treated as barred by limitation.”
Relying on the decision of the Delhi High Court in Ram Balram Buildhome Vs. ITO, which dealt with an identical issue, the Bench held that the reassessment proceedings were invalid as they were initiated beyond the extended period of limitation.
Consequently, the ITAT allowed the appeals, quashed the reassessment and penalty proceedings for both years, and held that the other grounds raised by the Assessee became academic in light of this decision.
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