Sohanraj Praveen Kumar Vs ACIT (Madras High Court)
Section 148 Reassessment Beyond Section 149 Time Limit is Unsustainable: Madras HC
Madras High Court held that reopening of assessment beyond the period of limitation prescribed under section 149(1)(a) and (b) of the Income Tax Act is without jurisdiction. Accordingly, writ petition is allowed and proceedings set aside.
Facts- This Writ Petition has been filed by the Petitioner challenging the Notice dated 26.03.2021 issued by the 2nd Respondent, for the Assessment Year 2013-2014 and consequential Speaking Order dated 27.03.2022 passed by the 1st Respondent. Notably, by the Impugned Speaking Order dated 27.03.2022, the 1st Respondent has justified the re-opening of the Assessment that was completed under Section 143(3) of the Income Tax Act, 1961 on 25.01.2016.
Conclusion- Held that situation that is contemplated in Clause (c) to Sub-Section 1 to Section 149 of the IT Act is not relevant for this case. If at all, the Impugned Section 148 Notice dated 26.03.2021 should have been issued within the period of limitation prescribed under Clause (a) and Clause (b) to Sub-Section 1 to Section 149 of the IT Act. The period of limitation for issuance of Notice within four or six years as the case may be is to be reckoned from the end of the Assessment year 2013-2014 i.e., 31.03.2014. The period of four years would have expired on 31.03.2017. Six years would have expired on 31.03.2019. Since the Notice for re-opening of the assessment was itself issued only on 03.2021, which is long after expiry of the period of limitation prescribed in Section 149(1)(a) and (b) of the IT Act as it stood till 31.03.2021 prior to its substitution by Finance Act, 2021 with effect from 01.04.2021, the impugned proceedings have to be held to be without jurisdiction. Therefore, this Writ Petition deserves to be allowed.
