ACIT Vs Ramchand Thakurdas Jhamtani (ITAT Mumbai)
Income Tax Appellate Tribunal (ITAT), Mumbai Bench, has quashed a reassessment order issued against Ramchand Thakurdas Jhamtani for the Assessment Year 2014-15. The tribunal’s decision, delivered on cross-appeals filed by the Revenue and cross-objections by the assessee, hinged on the crucial finding that the reassessment notice issued under Section 148 of the Income Tax Act, 1961, was beyond the legally prescribed period of limitation.
The dispute originated when the Assessing Officer (AO) initiated reassessment proceedings against Mr. Jhamtani for AY 2014-15. An initial notice under the erstwhile Section 148 of the Act was issued on June 7, 2021. This date is significant as it fell after the new reassessment regime, introduced by the Finance Act, 2021, came into effect on April 1, 2021, but before the Supreme Court’s intervention to clarify the transition.
The Legal Landscape and Supreme Court’s Intervention:
The period between April 1, 2021, and June 30, 2021, became a contentious phase in income tax reassessment. The Finance Act, 2021, brought about a complete overhaul of Sections 147 to 151, introducing a new, more assessee-friendly reassessment procedure. However, many assessing officers continued to issue notices under the old, unamended Section 148 during this transitional period, leading to numerous legal challenges across various High Courts.
