Ram Babu Agarwal Vs ACIT (Rajasthan High Court)
Rajasthan High Court heard a plea by Ram Babu Agarwal challenging the reopening of his assessment for the Assessment Year (AY) 2012-13 through a notice issued under Section 148 of the Income Tax Act, 1961. The petitioner argued that the reassessment proceedings were time-barred under Section 149(1)(b) and thus beyond jurisdiction. Citing the Finance Act, 2021, he contended that notices for assessments prior to April 1, 2021, could not be issued if they were already beyond the prescribed limitation period under the earlier provisions of Sections 149, 153A, or 153C.
The petitioner relied on various judicial precedents, including the Madras High Court’s ruling in A.R. Safiullah v. ACIT (2021) and Delhi High Court decisions in Filatex India Ltd. v. DCIT (2023) and Alankit Insurance TPA Ltd. v. DCIT (2023), to assert that similar reassessments had been quashed as time-barred. These cases had established that reassessment notices issued under Section 148, after the lapse of the statutory time limit, lacked jurisdiction and could not be sustained.
In response, the Income Tax Department defended the reassessment, arguing that the notice was within the limitation period as per a combined reading of Sections 148, 149(1)(b), and 153C. The department further claimed that the reopening of assessment was based on material discovered during a search at another person’s premises, which allegedly revealed bogus entries linked to the petitioner. The revenue emphasized that, at this stage, the petitioner was not yet reassessed, but rather the assessment was reopened for further examination.
