Re-assessment notice issued U/s 148 being barred by limitation under the new provisions of section 149(1) is liable to be quashed and set aside.

 

The “C” Bench of Mumbai ITAT in ITO v. Pushpak Realities Pvt. Ltd.( ITA No. 4812/Mum/2024; Date of Judgment: 07/11/2024; AY: 2015-16) [Mum ITAT] held that reassessment notice issued under section 148 of the Income Tax Act being barred by limitation under the new provisions of section 149(1) is liable to be quashed and set aside.

In this case, the Revenue challenged the quashing of reassessment notices issued under section 148 of the Income Tax Act. The primary argument revolved around whether these notices were barred by limitation according to the new provisions under section 149(1) and whether they could be extended by the provisions of the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance (TOLA). The reassessment notices for AYs 2013-14, 2014-15, and 2015-16 were challenged primarily on the grounds of being time-barred. The Revenue contended that notices issued under section 148 were extended by TOLA and aligned with the Supreme Court ruling in Union of India vs. Ashish Agarwal (2022) 444 ITR 1(SC).

Details of reassessment notices issued:
1. AY 2013-14: Notice issued on 29/07/2022; limit expired on 31/03/2020.
2. AY 2014-15: Notice issued on 31/07/2022; limit expired on 31/03/2021.
3. AY 2015-16: Notice issued on 29/07/2022; limit expired on 31/03/2022.

The ITAT upheld the decision of the CIT(A) to quash the reassessment notices on the basis that they were issued beyond the prescribed limits, which were confirmed by the Supreme Court in the case of Union of India v. Rajeev Bansal (2024) 167 taxmann.com 70 (SC). The Tribunal emphasized that no extensions under TOLA can be applied beyond June 30, 2021, for these matters. Reassessment notices issued after April 1, 2021, for AY 2015-16 were invalid as per the Revenue’s own concessions before the Supreme Court in para 19 of the Order. Therefore, all notices were quashed relying on para 54, 73, 75 , 76, 94, 95, 96 and114 of the Supreme Court Judgment as they were barred by limitation. The appeals filed by the Revenue were dismissed, reinforcing the importance of adhering to the stipulated timelines for reassessment notices under the Income Tax Act, reaffirming the interpretation of the relevant legal provisions as established in prior landmark Supreme Court rulings.

The copy of the order is as under:

1731317712-jQFdtq-1-TO (1)