Manojbhai Parsottambhai Poriya Vs ITO (ITAT Mumbai)
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) allowed the appeal filed by the assessee against the order of the Commissioner of Income Tax (Appeals) dated 07.01.2025 for Assessment Year 2017-18.
The assessee had challenged several issues, including the validity of the reassessment proceedings, the issuance of notice under Section 148 of the Income Tax Act, additions made under Sections 69C and 56(2)(vii)(b), levy of penalties under Sections 270A and 272A(1)(d), and charging of interest under Section 234B.
At the outset, the assessee’s counsel argued that the notice under Section 148 issued on 20.07.2022 was invalid because the amount alleged to have escaped assessment was less than ₹50 lakh and more than three years had elapsed from Assessment Year 2017-18. Reliance was placed on the Supreme Court’s decision in Union of India v. Rajiv Bansal and the Mumbai Tribunal’s decision in Amina Aslam Qureshi v. ITO.
The Tribunal reproduced and relied upon the reasoning of the coordinate bench in Amina Aslam Qureshi v. ITO. In that case, the Tribunal had noted that, under the amended provisions governing reassessment, the limitation period of three years applies retrospectively in all situations, while a longer period of six years is available only in cases where the income escaping assessment is likely to exceed ₹50 lakh. The coordinate bench had held that where the escaped income was below ₹50 lakh, a notice issued beyond three years could not be sustained.
