ACIT Vs Bhageria Industries Limited (ITAT Mumbai)
Revenue Misses Seven-Day Window: Mumbai ITAT Quashes AY 2014-15 Reassessment as Time-Barred
In Bhageria Industries Ltd. v. ACIT, the assessee challenged the validity of reassessment for AY 2014-15 on the ground that the notice under section 148 was issued beyond the permissible limitation period.
The original notice under the old reassessment regime was issued on 23 June 2021, when only seven days remained until the extended TOLA deadline of 30 June 2021. Following the Supreme Court’s decision in Union of India v. Ashish Agarwal, the Assessing Officer issued a fresh notice under section 148A(b) on 25 May 2022 and granted two weeks to respond. The assessee submitted its reply on 7 June 2022.
Applying the limitation computation laid down by the Supreme Court in Union of India v. Rajeev Bansal, the Tribunal held that after excluding the response period, the Revenue had only the surviving seven-day period to issue the reassessment notice. Accordingly, the last permissible date was 15 June 2022.
However, the order under section 148A(d) and the consequential notice under section 148 were issued only on 20 July 2022, well beyond the surviving limitation period.
The Mumbai ITAT therefore quashed the notice under section 148 and the consequential reassessment as time-barred and invalid. Since the assessment itself was annulled, the Revenue’s appeal on the merits became infructuous.
