Jagdish Raghunathji Lahoti Vs ACIT (ITAT Mumbai)
Time-Barred Notice Dooms Reassessment: ITAT Mumbai Quashes 148 Action- Third-Party Search Can’t Trigger 147: Tribunal Deletes Additions of ₹13 Cr
ITAT Mumbai quashed reassessment notices issued u/s 148, holding them to be time barred in the light of the decision of the Hon’ble Supreme Court in UOI v. Rajeev Bansal [2024] 167 taxmann.com 70 (SC).
The case arose from information unearthed during a search in the premises of Shree Renuka Mata Multi State Urban Co-operative Credit Society Ltd., which revealed substantial cash deposits in the name of Assessee. For AY 2014-15 AO alleged unexplained deposits of Rs. 2.33 crore & for AY 2016-17 deposits of Rs. 10.94 crore were added as unexplained u/s 69/69A. AO proceeded ex parte as there was no response to notices, & CIT(A)/NFAC sustained the additions.
Before the Tribunal, it was argued that information derived from a third-party search could only be assessed u/s 153C & not u/s 147, that the notices issued u/s 148 were beyond limitation prescribed in law, & that the jurisdictional AO issued the notice instead of the faceless AO, rendering the proceedings invalid.
Tribunal, after examining the dates & applying the ratio of Rajeev Bansal (SC), categorically held that the notices issued u/s 148 were time barred & liable to be quashed. Consequently, the reassessment proceedings collapsed in toto & the additions of Rs. 2.33 crore for AY 2014-15 & Rs. 10.94 crore for AY 2016-17 stood deleted. Since the very basis of reassessment was invalid, other grounds raised by the Assessee became academic in nature & were not adjudicated.
