2024 (10) TMI 107 - HC - Income Tax

Validity of reassessment proceedings beyond period of limitation - notice u/s 148 has evidently been issued one year and 116 days after the expiry of 6 years since the end of the AY 2014-15 the applicable period of limitation u/s 149 - HELD THAT - We find that the matter at hand is squarely covered by the ruling by a Division Bench of this Court in the case of Godrej Industries Ltd. 2024 (3) TMI 109 - BOMBAY HIGH COURT - The facts of the case in Godrej are quite similar the Assessment Year was 2014-15; the show cause notice u/s 148A (b) came to be issued for the first time on 24 May, 2022; and the Section 148 notice came to be issued on 31 July, 2022. In the instant case, the notice u/s 148 was issued on 25 July, 2022 just about six days before the notice in Godrej. A plain reading of the foregoing would make it clear that the ruling in Godrej explicitly rules that the validity of a notice u/s 148 must be judged on the basis of the law as existing on the date of which the notice is issued. In the instant case, the deadline for issuance of notices for AY 2014-15 had expired on 31st March, 2021. Consequently, and evidently, the notice issued in the instant case was hopelessly barred by limitation. Therefore, the 148 Notice issued indeed deserves to be quashed as being barred by limitation. Assessee as well as the Respondent-Revenue confirm the factual position found above. Consequently, in reliance upon the law declared in Godrej, the reassessment proceedings being barred by limitation, cannot be permitted to be continued, calling for interference by this Court. Therefore, we hereby quash and set aside the 148 SCN dated 25 July, 2022 and all consequential actions emanating from the 148 SCN. Since we are disposing of this Petition on the basis of the reassessment being barred by limitation u/s 149 we express no opinion on any other issues raised in the Writ Petition.

Summary

Issues:
Challenge to notice under Section 148 of the Income Tax Act, 1961 for reassessment of returns filed for Assessment Year 2014-15. The proceedings are allegedly barred by limitation under Section 149 of the Act. Original notice issued by Jurisdictional Assessing Officer instead of Faceless Assessing Officer as required under Section 151A of the Act.

Analysis:
The Writ Petition challenges a notice dated 25th July, 2022, issued under Section 148 of the Income Tax Act for reassessment of returns filed for the Assessment Year 2014-15, contending that the proceedings are time-barred under Section 149 of the Act. The notice was issued one year and 116 days after the expiration of the limitation period stipulated under Section 149. The Petitioner seeks intervention under Article 226 of the Constitution of India, arguing that the proceedings are barred by limitation.

The Writ Petition also contests the legality of the original notice under Section 148, claiming that it was issued by the Jurisdictional Assessing Officer instead of the Faceless Assessing Officer as mandated by Section 151A of the Act. This challenge is based on a ruling by a Division Bench of the Court in a previous case. The Court notes that the matter is similar to a previous case, Godrej Industries Ltd. v. The Assistant Commissioner of Income Tax, where the issue of limitation was addressed. The Division Bench in Godrej held that the notice under Section 148 issued beyond the time period specified in the Act is barred by limitation.

The Court emphasizes that the validity of a notice under Section 148 must be determined based on the law in force at the time of issuance. In this case, the deadline for issuing notices for the relevant Assessment Year had already lapsed, rendering the notice in question as time-barred. Both parties confirm the factual position, leading the Court to quash the notice and all consequential actions, citing the ruling in Godrej.

Given the finding that the reassessment is barred by limitation under Section 149, the Court declines to address other issues raised in the Writ Petition. The Petition is disposed of accordingly, with no costs imposed.