Adherence to statutory time limits is crucial in tax assessments
Recently, Income Tax Appellate Tribunal, Mumbai in the case of Pushpak Realties Pvt. Ltd. (ITA No. 4812/Mum/2024) has reiterated that adherence to statutory time limits is crucial in tax assessments. This case highlights the importance of timely action by tax authorities and the legal protections available to taxpayers against arbitrary reassessment notices.
Let us have a short overview of the case.
The Revenue filed appeals against orders from the National Faceless Assessment Centre (NFAC) regarding the reopening of assessments for the assessment years 2013-14, 2014-15, and 2015-16 under Section 147 of the Income Tax Act.
The primary issue was the validity of notices issued under Section 148, which were quashed by the lower appellate authorities on the grounds of being barred by limitation.
o For AY 2013-14, the notice was issued on July 29, 2022.
o For AY 2014-15, the notice was issued on July 31, 2022.
o For AY 2015-16, the notice was issued on July 28, 2022.
CIT(A) Findings:
The Commissioner of Income Tax (Appeals) quashed the notices based on the judgment in Union of India vs. Ashish Agarwal, which clarified the time limits for issuing reassessment notices.
Tribunal’s finding and decision (no one appeared for the taxpayer):
o The Tribunal additionally noted that the recent Supreme Court’s ruling in Rajeev Bansal confirmed that notices issued during the COVID-19 pandemic were deemed valid under certain conditions, but the notices in this case were issued beyond the permissible time limits.
o The court highlighted that the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act (TOLA) did not extend the time limits for these specific assessments.
o The Tribunal upheld the CIT(A)’s decision, confirming that the notices were barred by limitation.
o It emphasized that the Revenue’s arguments regarding the applicability of TOLA did not extend the time limits for these assessments.
The copy of the Appellate is as under:
