Reassessment Notice Time-Barred as Issued Beyond Limitation Period: Karnataka HC

Infineon Technologies AG AM Campeon Vs DCIT (International Taxation) (Karnataka High Court)

The Karnataka High Court examined the validity of reassessment proceedings initiated against the petitioner for Assessment Year 2010–11 under the Income-tax Act, 1961. The petitioner challenged the reopening on the ground that it was barred by limitation under Section 149, which required issuance of a valid notice within six years from the end of the relevant assessment year.

The Revenue relied on a notice dated 31 March 2017 issued under Section 148, followed by a corrigendum dated 11 April 2017 correcting the assessment year from 2015–16 to 2010–11. The petitioner contended that the notice was actually issued on 4 April 2017, as evidenced by postal records, and therefore fell beyond the limitation period ending on 31 March 2017. The petitioner further argued that the corrigendum was not a mere procedural correction but a substantive change, and hence amounted to a fresh notice issued beyond limitation.

The Court noted that the Revenue failed to establish that the original notice was issued on 31 March 2017. It accepted the petitioner’s evidence showing that the notice was dispatched on 4 April 2017 and delivered on 12 April 2017, rendering it time barred. The Court also examined the contents of the original notice and found that it pertained to Assessment Year 2015–16, not 2010–11. It held that jurisdiction to reopen an assessment arises only upon issuance of a valid notice under Section 148, and the original notice invoked jurisdiction for a different assessment year.