2018 (9) TMI 1752 - AT - Income Tax

Reopening of assessment - period of limitation - Held that - In this case, the assessment year involved is 2008-09 and the notice u/s 148 was issued to the assessee on 10.03.2015 within the period of six years from the end of the relevant assessment year. The amendment to section 149(3) was made by Finance Act 2012 w.e.f. 01.07.2012. Prior to the amendment, the time limit for issue of notice u/s 148 in the case of representative assessee was two years. The limitation of two years was expired by March 2011. On the similar facts the ITAT, Visakhapatnam in the case of V.Pratima Rao and 5 others 2018 (6) TMI 366 - ITAT VISAKHAPATNAM held that the amendment is not applicable for enlargement of the time limit already expired for issue of notice u/s 148. The period of limitation of two years was expired before the amendment came into force. Therefore since the facts are identical, respectfully following the view taken by this Tribunal in the case cited, we hold that the notice issued u/s 148 to the Gudivada Shyam Kumar Naidu, Visakhapatnam representative assessee is barred by limitation and accordingly, the notice issued u/s 148 is quashed and the consequent assessment made u/s 147 r.w.s. 143(3) dated 28.03.2016 is annulled. - Decided in favour of assessee.

Summary

Issues:
Validity of notice u/s 147 beyond the time period of two years u/s 149(3).

Analysis:
1. The appeal was filed against the order of the Commissioner of Income-Tax (Appeals) for the assessment year 2008-09. The case involved a representative assessee who sold immovable property to another party. The Special Power Agent (SPA) for the transaction was treated as an agent, and a notice u/s 148 was issued to the representative assessee.

2. The main objection raised was regarding the validity of the notice u/s 147 beyond the two-year time period u/s 149(3). The CIT(A) upheld the notice based on an amendment to the Finance Act in 2012, extending the limitation period to six years. The ITAT analyzed the case, considering the amendment's applicability retrospectively and its impact on the time limit for issuing the notice.

3. The ITAT referred to a similar case involving non-resident vendors and tax deduction at source u/s 195 of the Income Tax Act. It highlighted the importance of the time limit for issuing notices u/s 148 in cases involving agents of non-residents. The ITAT emphasized the significance of adhering to statutory time limits and the implications of subsequent amendments on such limitations.

4. The ITAT examined the provisions of section 149(3) and the implications of the Finance Act 2012 amendment. It cited relevant case laws and legal principles to support its decision. The ITAT concluded that the notice u/s 148 issued to the representative assessee was barred by limitation as the two-year period had expired before the amendment came into force. Consequently, the notice was quashed, and the assessment made was annulled.

5. The ITAT's decision was based on the interpretation of statutory provisions, case laws, and the retrospective applicability of amendments. By considering the specific facts of the case and the legal framework, the ITAT ruled in favor of the assessee, emphasizing the importance of adhering to statutory timelines and legal principles in taxation matters.

6. The ITAT's detailed analysis and reliance on legal precedents demonstrate a thorough consideration of the issues raised regarding the validity of the notice u/s 147 beyond the statutory time limit. The decision highlights the significance of procedural compliance and statutory interpretation in tax assessments, ensuring fair treatment and upholding legal principles in such matters.