A.R. Safiullah Vs ACIT (Madras High Court)
Madras High Court, in the case of A.R. Safiullah Vs ACIT, addressed the validity of an income tax notice issued under Section 153A of the Income Tax Act, 1961. The petitioner, whose premises were searched on April 10, 2018, challenged the notice issued for Assessment Year (AY) 2009-10, arguing that it fell beyond the permissible period for reassessment. The central issue before the court was the interpretation of Explanation-I to Section 153A(1), which defines the “relevant assessment year” for issuing reassessment notices. The respondent, representing the Income Tax Department, argued that post-amendment provisions allowed assessment beyond six years, extending the period to ten years under specific conditions.
The court examined the amendments introduced by the Finance Act, 2017, which expanded the reassessment period from six years to ten years, subject to certain conditions. The Revenue contended that the ten-year period should be counted from the assessment year relevant to the financial year in which the search occurred, allowing them to include AY 2009-10 within this scope. However, the court noted that the amendment clearly specifies that the ten-year computation begins from the end of the assessment year relevant to the financial year in which the search was conducted. Since the search occurred in April 2018, the corresponding assessment year was 2019-20, making the last permissible year for reassessment AY 2010-11. Thus, the notice for AY 2009-10 was beyond the statutory limit.
