2024 (8) TMI 497 - AT - Income Tax

Validity of reassessment proceedings - period of limitation - as submitted AO has issued notice within the extended time limit provided by Taxation and Other Laws (Relaxation and Amendment of certain provisions) Act, 2020 (TOLA) - HELD THAT - Hon ble High Court in the case of Hexaware Technologies Ltd 2024 (5) TMI 302 - BOMBAY HIGH COURT followed its earlier decisions rendered in the case of Tata Communications Transformation Services Ltd 2022 (4) TMI 44 - BOMBAY HIGH COURT and Siemens Financial Services (P) Ltd 2023 (9) TMI 552 - BOMBAY HIGH COURT held that the provisions of TOLA provide that any notice issued under sec. 148 of the Act after 31st March 2021 will travel back to the original date. With regard to the second question, the Hon ble High Court held that the first proviso to sec. 149 of the new provisions will not enable issuing of notice u/s 148 of the Act after 1st day of April, 2021, if the notice could not have been issued under the erstwhile provisions of sec. 149(1)(b) of the Act on the date when the impugned 148 notice was issued. Under the erstwhile provisions, a notice u/s 148 of the Act could be issued on or before 31st March, 2022. Accordingly, the Hon ble High Court held that the notice u/s 148 issued on 27th August, 2022 is barred by limitation. The present case is related to AY 2015-16 and the notice u/s 148 of the Act has been issued on 29th July, 2022. The last date for issuing notice u/s 148 of the Act under the old provision is 31st March, 2022. Hence as held in the case of Hexaware Technologies Ltd (supra), the above said notice is barred by limitation. Assessee appeal allowed.

Summary

Issues:
1. Condonation of delay in filing appeal before Ld.CIT(A).
2. Validity of re-assessment proceedings for AY 2015-16.

Analysis:
1. The first issue revolves around the condonation of delay in filing an appeal before the Ld.CIT(A). The appellant argued that the delay of 198 days was due to reasons beyond their control, such as the unawareness of the assessment order due to medical treatment of a key person handling tax matters. The appellant contended that there was a reasonable cause for the delay and requested condonation. However, the Ld.CIT(A) refused to condone the delay, leading to the appeal challenging this decision.

2. The second issue pertains to the validity of re-assessment proceedings for AY 2015-16. The appellant argued that the re-opening of assessment was invalid as the notice was issued beyond the statutory time limit. The appellant relied on a decision by the Hon'ble Bombay High Court in a similar case to support their argument. The respondent, on the other hand, argued that the notice was issued within the extended time limit provided by the Taxation and Other Laws Act. The Tribunal admitted the legal issue raised by the appellant, considering its significance.

3. The Tribunal referred to the decision of the Hon'ble Bombay High Court in a similar case involving the validity of a re-opening notice for AY 2015-16. The High Court held that notices issued under section 148 of the Act after March 31, 2021, would revert to the original date. Additionally, the High Court ruled that notices issued after April 1, 2021, under section 148 of the Act would be time-barred if they couldn't have been issued under the previous provisions by a specific date. Applying this precedent to the present case, the Tribunal found that the notice issued on July 29, 2022, for AY 2015-16 was beyond the statutory time limit, as per the decision of the High Court.

4. Consequently, the Tribunal concluded that the re-assessment proceedings for AY 2015-16 were invalid due to the notice being time-barred. As a result, the orders passed by the tax authorities were deemed quashed, and the appeal filed by the assessee was allowed. The Tribunal pronounced this decision on August 7, 2024, in the open court.