2024 (10) TMI 760 - HC - Income Tax

Validity of reassessment proceedings initiated beyond the period of limitation u/s 149 - HELD THAT - The ruling in Godrej 2024 (3) TMI 109 - BOMBAY HIGH COURT explicitly rules that the validity of a notice under Section 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 Assessment Year 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. We hereby quash and set aside the 148 SCN and all consequential actions emanating from the 148 SCN.

Summary

Issues:
Challenge to notice under Section 148 for reassessment of returns for Assessment Year 2014-15 being barred by limitation. Challenge to the original notice under Section 148 being illegal due to not being issued by Faceless Assessing Officer as required under Section 151A.

Analysis:
The Writ Petition was filed to challenge a notice dated 25 July, 2022, issued under Section 148 of the Income Tax Act for reassessment of returns filed for Assessment Year 2014-15, claiming that the proceedings were barred by limitation. The notice was issued one year and three months after the expiry of the applicable period of limitation under Section 149 of the Act. The Petitioner sought intervention under Article 226 of the Constitution based on the limitation issue.

The Writ Petition also contended that the original notice under Section 148 was illegal as it was issued by the Jurisdictional Assessing Officer, not the required Faceless Assessing Officer as per Section 151A. This challenge was influenced by a previous ruling of a Division Bench of the Court in a similar case. The Court heard arguments from both parties and considered the material on record.

The Court found that the case was similar to a previous ruling in Godrej Industries Ltd. v. The Assistant Commissioner of Income Tax, where the issue of limitation was addressed. The Court referred to the ruling which emphasized that the validity of a notice under Section 148 must be judged based on the law at the time of issuance. As the deadline for issuing notices for the relevant Assessment Year had passed, the notice in this case was deemed barred by limitation and therefore quashed.

Both parties confirmed the factual position, and based on the precedent set in Godrej, the Court quashed the notice and all consequential actions. The Court did not address other issues raised in the Writ Petition as it was not necessary due to the limitation issue. The Writ Petition was disposed of without costs.