Pamela Bhardwaj Vs ITO (ITAT Delhi)
Attempt to Extend Assessment Time Through Section 148 Fails- Reassessment Without Expiry of 143(2) Window Held Invalid by ITAT
Assessee had filed a return declaring ₹1.96 lakh income & ₹2 lakh agricultural income, which was accepted originally. Subsequently, reassessment proceedings u/s 147 were initiated citing unexplained cash deposits of ₹25.5 lakhs & property purchase worth ₹1.14 crore. The reassessment concluded by accepting the original return without making additions. PCIT later invoked Sec 263, terming the reassessment order as erroneous & prejudicial to revenue, & directed fresh adjudication.
Assessee challenged the validity of the PCIT’s revision order u/s 263, which set aside the reassessment order passed under Sections 143(3)/147.
Before the Tribunal, Asseseee argued that the reassessment u/s 147 itself was invalid because Notice u/s 148 was issued on 14.09.2015 while the original return was still within the scrutiny window (143(2) time limit had not expired and there was no valid reason to believe income had escaped assessment. Also no proper approval u/s 151 was obtained. Citing Qatalys Software Technologies Ltd., K.M. Pachayappan, TCP Ltd., Assesseee argued that reassessment during the pendency of original proceedings is invalid.
Tribunal noted that when admittedly during the pendency of the original assessment particularly before the expiry of the time limit for issuance of notice u/s 143(2), i.e. before 30.09.2016 the notice u/s 148 dt 14.09.2015 was issued by AO, the same is found to be an attempt to enlarge the time available for framing the assessment is bad in law. The entire proceeding, therefore, u/s 147 is, void-abinitio & therefore, liable to be quashed. Once, the reassessment proceeding u/s 147/148 is found to be void-ab-initio, the further proceeding initiated by . PCIT u/s 263 whereby & whereunder the reassessment proceeding u/s 147/148 is sought to be reopened is found to have no legs to stand on & thus, quashed.
