Smt. Sobha Rani Vs ITO (ITAT Delhi)
Assessee filed appeal against order of NFAC, confirming reassessment u/s 147 r.w.s. 144B for AY 2017-18. The reassessment added ₹17.62 lakh as unexplained income, raising total assessed income to ₹19.18 lakh.
Before Tribunal, Assessee challenged reassessment on the sole legal ground that the notice issued u/s 148 on 26.07.2022 was barred by limitation. The original notice under the Taxation & Other Laws (Relaxation & Amendment of Certain Provisions) Act, 2020 (TOLA) was issued on 29.06.2021. The escaped income being below ₹50 lakh, the case fell within the three-year limit u/s 149(1)(a) (as amended by Finance Act 2021).
Assessee argued that the permissible three-year period for AY 2017-18 expired on 31.03.2021, & under the relaxation granted by the Supreme Court in UOI vs. Rajeev Bansal (Civil Appeal No. 8629/2024), any notice issued under the old regime between 20.03.2020 & 30.06.2021 would be valid only if reissued within the “surviving time” post 01.04.2021. In this case, since the surviving time was just one day (till 07.06.2022), the subsequent notice u/s 148 dated 26.07.2022 was clearly beyond the limitation period & hence invalid.
Tribunal agreed with this contention, holding that the notice u/s 148 issued on 26.07.2022 was time-barred & void, as the escaped income was less than ₹50 lakh & the period of limitation had expired. Following the ratio of Rajeev Bansal (SC), Tribunal quashed both the notice & consequent reassessment.
