Shree Cement Limited Vs ACIT (Rajasthan High Court)
The Rajasthan High Court, in the case of Shree Cement Limited vs. ACIT, addressed the legality of a reassessment notice issued under Section 148 of the Income Tax Act, 1961, for the Assessment Year 2017-18. The petitioner, Shree Cement, argued that the notice, along with the preceding order under Section 148A(d), was invalid and barred by limitation. The core of the dispute revolved around the reassessment proceedings initiated after a survey revealed alleged escaped income related to deductions claimed by the company under Section 80IA for its Solid Waste Management System, Water Treatment System, and Power Generation Undertaking.
The central issue examined by the Court was the notice’s validity concerning the time limit. The Court relied on its earlier judgment in Hexaware Technologies Ltd. v. ACIT, which interpreted the first proviso to Section 149 of the Income Tax Act. The Court confirmed that for the Assessment Year 2017-18, the six-year limitation period for issuing a notice under the old law had expired on March 31, 2024. Since the reassessment notice was issued on May 1, 2024, it was held to be barred by limitation. The Court rejected the Revenue’s argument that the fifth and sixth provisos to Section 149 could extend this period, clarifying that these provisos only apply to the three or ten-year limitation periods, not the restriction imposed by the first proviso. This finding, based on the principle that the law in existence at the time of the notice’s issuance governs its validity, was sufficient to invalidate the notice.
