Section 148A(d) Order After Limitation Makes Reassessment Void: ITAT Mumbai

ITS India Pvt. Ltd. Vs The Assessing Officer (ITAT Mumbai)

Repeated Section 148A(b) Notices Cannot Keep Reopening Alive: Mumbai ITAT Quashes Reassessment

Summary: Once an assessee has replied to a show cause notice under section 148A(b), can the Assessing Officer issue further notices and treat the last reply as the starting point for passing the order under section 148A(d)? The Mumbai ITAT rejected that approach in ITS India Pvt. Ltd. It held that the later notices, issued without a request from the assessee for more time or a rehearing, could not rescue an order passed after the prescribed time limit. The consequence was substantial. The Tribunal held the section 148A(d) order invalid, found that the subsequent section 148 notice had no valid foundation, and quashed the reassessment as void from inception. The reassessment had disallowed a short term capital loss of ₹10,51,86,870; the Tribunal did not examine that disallowance on merits.

An Earlier Assessment Was Reopened

ITS India Pvt. Ltd., engaged in manufacturing, repairing and upgrading equipment used in oil and gas exploration, filed its return for AY 2014-15 declaring a loss of ₹13,97,58,569. A scrutiny assessment under section 143(3) was completed on 22 December 2016, determining a loss of ₹1,26,24,570 under the normal provisions and a book loss of ₹10,51,86,870 under section 115JB.