Sainik Co-operative House Building Society Ltd. Vs ITO (ITAT Amritsar)
Conclusion: Reassessment notice issued under the new regime on July 25, 2022, for the Assessment Year 2013-14, was barred by limitation, thereby rendering the subsequent assessment order invalid.
Held: Assessee, an Association of Persons (AOP), did not file an income tax return for the Assessment Year 2013-14. The tax authorities identified cash deposits of approximately ₹72.10 lakhs in its bank account for that year. An initial reassessment notice was issued under the old (erstwhile) section 148. Following the Supreme Court’s landmark judgment in Ashish Agarwal (2022) and Union of India v. Rajeev Bansal (2024), this notice was deemed to be a notice under the new section 148A(b). AO then followed the new procedure, issuing a formal notice on May 20, 2022. After passing an order under section 148A(d), AO issued a fresh, final notice under the new section 148. Assessee did not comply with subsequent statutory notices, leading to an ex-parte assessment order under section 144, where the entire cash deposit was added back to its income under section 69A. It was held that relying on the subsequent Supreme Court clarification in Union of India v. Rajeev Bansal, the court examined the specific time limits applicable to notices for AY 2013-14. It calculated the “surviving period” of limitation available to the tax department for this specific assessment year. Based on this calculation, the court determined that the revised deadline for issuing the fresh notice under section 148 had expired on June 26, 2022. Since the notice in question was issued on July 25, 2022, it was held to be barred by limitation. Consequently, the time-barred notice was declared invalid, and the entire reassessment proceeding, including the final assessment order passed under section 147, was quashed.
