Pakarahalli Narayanappa Srinivasgowda Vs ITO (ITAT Bangalore)
The assessee was alleged to have received ₹22.13 crore in connection with a property transaction where he was a confirming party. Based on this information, the AO issued a notice u/s 148 on 29-06-2021 under the old reassessment regime. Following the Supreme Court decision in Union of India v. Ashish Agarwal, such notices were treated as show-cause notices under the new regime and the AO subsequently issued notice u/s 148A(b) on 20-05-2022, to which the assessee replied on 05-06-2022.
Thereafter, the AO passed an order u/s 148A(d) and issued a fresh notice u/s 148 on 22-07-2022, leading to reassessment u/s 147 r.w.s. 143(3). The assessee challenged the reassessment before the Tribunal contending that the fresh notice was beyond the permissible limitation period based on the concept of “surviving period” explained by the Supreme Court in Union of India v. Rajeev Bansal (2024).
The Tribunal observed that when notices issued between 01-04-2021 and 30-06-2021 under the old regime are treated as notices under section 148A(b), the AO must complete the procedure and issue the fresh notice within the remaining limitation period available under the statute (surviving period). In the present case, the original notice was issued on 29-06-2021, leaving only one day of limitation. Considering the time granted to the assessee to reply, the permissible time expired around 22-06-2022, whereas the AO issued the fresh notice only on 22-07-2022.
Relying on the Supreme Court ruling in Rajeev Bansal and the Madras High Court decision in Veena Gupta v. DCIT, the Tribunal held that the fresh notice u/s 148 was issued beyond the surviving limitation period and therefore the reassessment proceedings were time-barred and void in law.
Since the reassessment itself was invalid, the Tribunal quashed the assessment order and treated other grounds on merits as academic
FULL TEXT OF THE ORDER OF ITAT BANGALORE
