Bapa Sitaram Coal Vs ITO (ITAT Rajkot)
Only Two Days Survived on the Limitation Clock; Revenue Could Not Take an Extra Month: Reassessment & ₹51.29 Lakh Addition Quashed
The Rajkot ITAT has quashed reassessment proceedings for AY 2017-18 because the consequential notice u/s 148 issued under the new reassessment regime was beyond the surviving period of limitation available to the Revenue after giving effect to the Supreme Court decisions in Union of India v. Ashish Agarwal and Union of India v. Rajeev Bansal.
The original notice under the old reassessment regime was issued on 29.06.2021. Since the extended limitation under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 expired on 30.06.2021, only two days remained on the limitation clock. After applying the permissible exclusions under the Supreme Court’s directions, the consequential notice was required to be issued by 11.06.2022. The notice was actually issued on 12.07.2022 and was therefore time-barred.
The assessee, Bapa Sitaram Coal, filed its return for AY 2017-18 declaring a total income of ₹18,16,310. The AO subsequently received information from the Investigation Wing at Surat alleging that the assessee had made cumulative cash payments of ₹51,29,000 to Shree Padmavati Tradelink, a proprietary concern of Shri Niranjan Rameshchandra Laheru, towards the purchase of coal.
