Babu Hasan Shaikh Vs ITO (ITAT Mumbai)
The Income Tax Appellate Tribunal (ITAT), Mumbai, has set aside a reassessment order against Babu Hasan Shaikh, an individual engaged in the construction business. The case, related to the assessment year (AY) 2015-16, centered on the validity of a reassessment notice issued by the Assessing Officer (AO). The AO had initiated proceedings after discovering that the assessee had sold an immovable property for Rs. 1.98 crore but had not filed an income tax return. The reassessment notice under Section 148 of the Income Tax Act was issued on April 18, 2022, a date the assessee’s legal representative argued was beyond the permissible statutory time limit.
Legal Arguments Over Limitation Period
The core of the dispute was the application of new time-limit provisions for reassessment notices, which came into effect from April 1, 2021. The assessee’s counsel contended that for AY 2015-16, the time limit for issuing a notice was six years from the end of the relevant assessment year, as per the law prior to the 2021 amendment. This six-year period expired on March 31, 2022. Since the notice was issued on April 18, 2022, it was considered time-barred. The revenue, in its defense, relied on the new provisions and argued that the time granted to the assessee to respond to the prior show-cause notice should be excluded from the computation of the limitation period.
