Reassessment Quashed Because Notice Was Issued Beyond Limitation Period

Anita Tomar Vs ITO (ITAT Delhi)

The Delhi Bench of the Income Tax Appellate Tribunal considered an appeal for Assessment Year 2016–17 challenging reassessment proceedings initiated under sections 147 read with 144 of the Income-tax Act, 1961. The primary issue before the Tribunal was the validity of the reopening itself. It was noted that the notice under section 148 had been issued on 30 March 2023, which was beyond three years from the end of the relevant assessment year. During the hearing, the Revenue could not dispute that, under section 149(1)(b) of the Act, reopening after three years is permissible only in cases where the escaped income amounts to or is likely to amount to ₹50 lakh or more. The Tribunal observed that this statutory exception did not apply in the present case. Accepting the assessee’s legal contention, the Tribunal held that the reopening was barred by limitation and therefore invalid. Consequently, the reassessment proceedings were quashed. The appeal was allowed in full, with the Tribunal rejecting the Revenue’s arguments and granting relief solely on the ground of limitation.

FULL TEXT OF THE ORDER OF ITAT DELHI

This assessee’s appeal for assessment year 2016-17, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2025-26/1080323022(1), dated 03.09.2025 involving proceedings under section 147 r.w.s. 144 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).

Heard both the parties. Case file perused.

2. It emerges at the outset during the course of hearing that there arises the first and foremost issue of validity of the impugned reopening itself since the learned assessing authority had issued section 148 notice to the assessee on 30^th March, 2023 i.e after more than three years from the end of the relevant assessment year herein AY 2016-17. The Revenue could hardly dispute that going by section 149(1)(b) of the Act, the only exception in clauses (i) to (iii) which has been stipulated by the legislature is in an instance of escaped income which amounts to or likely to Rs. 50 lakhs or more which is not the case in the assessee’s appeal before the tribunal.

3. Faced with this situation, the tribunal finds merit in the assessee’s instant first and foremost legal ground/argument to quash the impugned reopening as barred by limitation under section 149(1)(b) to reject the Revenue’s vehement contentions in very terms. Ordered accordingly.

4. This assessee’s appeal is allowed.

Order pronounced in the open court on 25^th November, 2025