2023 (12) TMI 538 - AT - Income Tax

Validity of order framed u/s 144/147 as barred by limitation - HELD THAT - After going through the proposition of law laid down by the Hon ble High Court in the case of Smt. Parveen Amin Bhathara ( 2022 (6) TMI 1283 - MADRAS HIGH COURT the case is similar to the present case before us and it is clearly covered in favour of the assessee. Therefore, the impugned notice in the present case u/s 148 of the Act in relation to A.Y. 2009-10 is beyond permissible time limit as prescribed under the Act. Therefore, the notice in the present case is liable to be treated as illegal and without any jurisdiction. Appeal of the assessee is allowed.

Summary

Issues Involved:
1. Validity of the re-assessment order u/s 144/147.
2. Issuance of notice u/s 148 beyond the permissible time limit.
3. Addition of Rs. 10,19,518/- on account of alleged bogus loss.

Summary:

1. Validity of the re-assessment order u/s 144/147:
The assessee contended that the re-assessment order dated 26.12.2016 framed u/s 144/147 is void and nullity as it is barred by limitation. The main grievance was that the notice u/s 148 was issued after the expiry of six years from the end of the relevant assessment year, making the re-assessment proceedings invalid.

2. Issuance of notice u/s 148 beyond the permissible time limit:
The notice u/s 148 dated 31.03.2016 was handed over to the speed post authority on 04.04.2016 and received by the assessee on 05.04.2016. The Tribunal referred to the judgement of the Hon'ble Madras High Court in the case of Smt. Parveen Amin Bhathara vs ITO, which held that the issuance of notice under section 149 is complete only when it is sent to the proper person within the end of the relevant assessment year. The Tribunal concluded that the notice in the present case was beyond the permissible time limit as prescribed under the Act and thus, illegal and without jurisdiction.

3. Addition of Rs. 10,19,518/- on account of alleged bogus loss:
Since the Tribunal found the notice u/s 148 to be beyond the permissible time limit, it quashed all consequential actions taken by the authorities below, including the addition of Rs. 10,19,518/- made by the AO on account of alleged bogus loss. The remaining grounds challenging the order were rendered academic and were not adjudicated.

Conclusion:
The appeal of the assessee was allowed, and the impugned notice and all consequential actions were quashed and set aside. The order was pronounced in the open court on 05.10.2023.