Smt. Kumarasamy Karthiyayini Vs ITO (ITAT Bangalore)
ITAT Quashes Two Reassessments: Time-Barred Assessment and Second Section 148 Notice During Pendency of Earlier Reassessment Held Invalid
Section 148 Notice Before Approval and Fresh Reopening During Pending Reassessment Prove Fatal; Bangalore ITAT Quashes Both Assessments
The Bangalore ITAT quashed two separate reassessment orders against the assessee, holding that the first reassessment was barred by limitation and the second reassessment was invalid because a fresh section 148 notice was issued while the earlier reassessment proceedings were still pending.
The assessee, engaged in the business of mobile recharge coupons, had cash deposits in her bank account. Based on a notice under section 148 dated 17.08.2017, the Assessing Officer completed a reassessment on 25.03.2022 and made an addition under section 69. The Tribunal observed that the Revenue failed to explain why a notice dated 17.08.2017 was allegedly served only on 17.02.2021. In the absence of convincing evidence, the date mentioned on the notice itself had to be treated as the date of issue. Consequently, under section 153(2), the reassessment should have been completed by 31.12.2018, rendering the order passed on 25.03.2022 hopelessly time-barred.
The Tribunal further noted another serious defect. The approval under section 151 for issuance of the section 148 notice was granted by the Joint Commissioner on 18.08.2017, whereas the notice itself bore the date 17.08.2017. Thus, the Assessing Officer had issued the notice before obtaining the mandatory sanction, making the reassessment vulnerable on this ground as well.
As regards the second reassessment, the Tribunal found that another notice under section 148 was issued on 31.03.2021, even though the earlier reassessment proceedings initiated through the 2017 notice were still pending and were eventually completed only on 25.03.2022. Relying on the decisions of the Supreme Court in K. Adinarayanamoorthi (65 ITR 607) and the Kerala High Court in Smt. Nilofer Hameed (235 ITR 161), the Tribunal held that a fresh reassessment notice cannot be issued when earlier assessment or reassessment proceedings are pending. Therefore, the second reassessment order dated 29.03.2022 was also held to be invalid.
Accordingly, both reassessment orders were quashed and the assessee’s appeals were allowed.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
These are the appeals filed by the assessee challenging the separate orders of the NFAC, Delhi both dated 31/01/2025 in respect of the A.Y. 2014-15.
