Whether reassessment proceedings initiated for AY 2015-16 relying on TOLA and Instruction issued by CBDT is bared by limitation?

Dilip Bhikhalal Desai Vs DCIT (Calcutta High Court)

Justice Shekhar B Saraf in this order was dealing with challenge to the order u/s 148A(d) and Notice u/s 148 dated 29th July,2022 which was passed by the AO for the AY 2015-16 admittedly relying on the Instruction No 01/2022 dated 11th May, 2022 and Appellant argued that the order as well as notice was barred by limitation in view of the provisions of Section 149(1) of the Act.

The court noting that the issuance of notice and initiation of re-assessment proceeding are beyond six years and, prima facie, it is barred by limitation both under the old Act as well as under newly amended provision relating to Section 147 of the Act stayed the proceedings by observing that the Appellant has been able to make out a prime facie case on limitation and directed the department to file affidavit in opposition , listing the matter in April, 2023.

There will be no further proceeding on the basis of the impugned order dated 29th July, 2022 being Annexure P-6 to the writ petition till the disposal of the writ petition.

This judgement will be a welcome latest order wherein the assessment for AY 2015-16 have also been stayed on limitation point.

FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT

The Court: Heard learned counsel appearing for the parties.

Affidavit of service filed in Court be kept with the records.

By this writ petition, petitioner has challenged the impugned order dated 29th July, 2022 under Section 148A(d) of the Income Tax Act, 1961 relating to assessment year 2015-16, and, all subsequent proceedings based on the impugned notice dated 29^th July, 2022 under Section 148 of the Income Tax Act, 1961, mainly on the ground of jurisdiction of the assessing officer in issuance of the impugned notice under Section 148 of the Act being barred by limitation under Section 149(1)(a)/149(1)(b) of the Income Tax Act, 1961. In the impugned order under Section 148A(d) of the Act, the assessing officer has tried to justify the initiation of re-assessment proceeding by relying on an instruction being No. 01/2022 dated 11^th May, 2022 issued by CBDT. Admittedly, the issuance of notice and initiation of re-assessment proceeding are beyond six years and, prima facie, it is barred by limitation both under the old Act as well as under newly amended provision relating to Section 147 of the Act.

Considering the submission of the parties, I am of the view that this matter deserves adjudication by calling for affidavits from the respondents and I am also of the view that the petitioner has been able to make out a prima facie case for an interim order by raising the issue of jurisdiction of the assessing officer concerned in initiating the impugned re-assessment proceeding.

Let the respondents file affidavit-in-opposition within four weeks; petitioner to file reply thereto, if any, within two weeks thereafter.

The matter shall appear for final hearing in the monthly list of April, 2023.

In the meantime, there will be no further proceeding on the basis of the impugned order dated 29^th July, 2022 being Annexure P-6 to the writ petition till the disposal of the writ petition.