Mohamedali Shabanali Badami Vs ITO (ITAT Mumbai)
The appeal challenged the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), which had upheld an assessment framed under Sections 144 read with 147 of the Income-tax Act, 1961 for Assessment Year (AY) 2015-16. The principal issue before the Tribunal was whether the notice issued under Section 148 on 19.04.2022 was barred by limitation under the first proviso to Section 149 and whether the consequential reassessment proceedings and assessment order were invalid.
The assessee contended that the CIT(A) failed to adjudicate the challenge to the validity of the notice under Section 148. It was argued that the notice dated 19.04.2022 had been issued after the expiry of six years from the end of the relevant assessment year and was contrary to the first proviso to Section 149. Consequently, both the notice and the assessment order under Sections 147 read with 144B were asserted to be bad in law.
The Tribunal noted that the assessee had not filed a return under Section 139(1). The Assessing Officer reopened the assessment on the ground that income arising from the sale of immovable property had allegedly escaped assessment. A show cause notice under Section 148A(b) was issued on 24.03.2022, enclosing information indicating that income chargeable to tax had escaped assessment. The Assessing Officer subsequently passed an order under Section 148A(d) on 19.04.2022, recording that the information generated through the Risk Management Strategy (RMS) suggested escaped income exceeding ₹50 lakh represented by an immovable property transaction. As no reply was filed by the assessee, the Assessing Officer concluded that it was a fit case for issuing notice under Section 148 and accordingly issued the notice on 19.04.2022.
