Reassessment Proceedings Held Void as Jurisdiction Was Assumed Beyond Limitation Period

Mangal Singh Vs ITO (ITAT Delhi)

The Delhi ITAT held that reassessment proceedings initiated for Assessment Year 2015-16 were invalid as the notice issued under Section 148 of the Income Tax Act on 27.07.2022 was barred by limitation under Section 149(1). The Tribunal noted that although the CIT(A)/NFAC had correctly recognized the jurisdictional defect in the reassessment proceedings, it erred in merely setting aside the assessment instead of annulling it. Relying on the Supreme Court’s decision in Rajeev Bansal and the Delhi High Court’s ruling in MakeMyTrip India Pvt. Ltd., the Tribunal observed that the Revenue itself had conceded that notices issued on or after 1 April 2021 for AY 2015-16 were unsustainable. Since the notice under Section 148 was issued beyond the prescribed limitation period, the reassessment proceedings were void ab initio. Consequently, the Tribunal quashed the notice and allowed the assessee’s appeal, granting complete relief.

Core Issue. Whether a notice issued under section 148 on 27.07.2022 for AY 2015-16 was barred by limitation under section 149(1), thereby rendering the entire reassessment proceedings void.

Facts. The assessee’s assessment for AY 2015-16 was reopened on the basis of an original notice under section 148 dated 30.06.2021, which, pursuant to the Supreme Court decision in Ashish Agarwal, was treated as a notice under section 148A(b). Thereafter, a fresh notice under section 148 was issued on 27.07.2022/28.07.2022. Based on this notice, the AO passed a reassessment order under section 147 read with sections 144 and 144B on 26.05.2023, assessing total income at ₹2.30 crore.