2023 (11) TMI 1255 - HC - Income Tax

Validity of reopening of assessment - period of limitation - date of notice or date of dispatch which is required to be looked into - Reopening after a period of 7 years i.e. on the last date of 7th year has reopened the case u/s. 147 by issuing notice u/s 148 - appellant argued that an issue of limitation was specifically raised as a ground before the Income Tax Appellate Tribunal but the Tribunal did not examine this issue and decided the case on its merits HELD THAT - From the record pleadings made by the appellant, it does not appear that the issue of limitation has been raised on a factual foundation that though notice u/s 148 bears the date 31.03.2017, it was not issued on that date but it was put in the course of dispatch after that date. Had there been a factual assertion made either before the Assessing Authority, or the Income Tax Appellate Tribunal or even before this Court, that issue would have been considered. In the absence of there being any factual foundation, the argument on issue of the limitation, does not have any substance. True it is that the Income Tax Appellate Tribunal has not recorded any finding on this, only on that ground, we are not inclined to admit this appeal as the substantial question of law would arise for consideration only on the basis of factual foundation, which is not there. Income tax appeal stands dismissed.

Summary

Issues Involved:
The judgment deals with the issue of the validity of reopening a case under section 147 of the Income Tax Act after the statutory limitation period of 4 years.

Validity of Reopening Case under Section 147:
The appellant raised the question of whether the Income Tax Appellate Tribunal was justified in upholding the action of the Assessing Officer in reopening the case after a period of 7 years, which exceeds the statutory provision of 4 years for reassessment. The appellant argued that the issue of limitation was specifically raised before the Tribunal but was not examined. It was contended that the date of dispatch of the notice under Section 148, not the date mentioned on the notice, should be considered. The appellant cited a judgment of the High Court of Gujarat to support their contention. However, the court noted that there was no factual foundation in the record to support the claim that the notice was dispatched after the date mentioned on it. Without such factual basis, the argument on the issue of limitation was deemed unsubstantiated. The court held that since there was no factual foundation, the substantial question of law could not be considered, leading to the dismissal of the income tax appeal.

Conclusion:
The High Court dismissed the income tax appeal as the argument regarding the limitation period for reopening the case under section 147 lacked a factual foundation. The court emphasized the importance of establishing a factual basis for legal arguments to be considered. Any pending applications were also disposed of in light of the dismissal of the appeal.