Bombay High Court: Notice Issued U/s 148 Income Tax Act Which Is Beyond Time Line Stipulated U/s 149(1) IT Act Is Invalid
The Bombay High Court that the notice for reassessment issued to the Petitioner under Section 148 of the Income Tax Act for the Assessment Year (AY) 2013-14, was time barred.
The Bombay High Court held that a notice issued under Section 148 of the IT Act which is beyond the timeline stipulated under Section 149(1) of the said Act is invalid.
The Court held that the notice for reassessment issued to the Petitioner under Section 148 of the Income Tax Act, 1961 (IT Act), for the Assessment Year (AY) 2013-14, was time-barred. The Court quashed and set aside the impugned assessment Order passed on the basis of the impugned notice.
A Division Bench of Justice AS Chandurkar and Justice Nivedita P Mehta held, “A notice under Section 148 of the IT Act accompanied by an order under Section 148A(d) is required to be issued within the time stipulated under Section 149 of the IT Act. Section 148A(d) does not govern the computation of time as contemplated in terms of Section 149 of the IT Act. The entire process under Section 148A(a) to (d) and the issuance of notice under Section 148 has to be completed within the total time available in terms of Section 149(1) of the IT Act for issuance of notice under Section 148. A notice issued under Section 148 of the IT Act which is beyond the time line stipulated under Section 149(1) is non-complaint and invalid.”
Advocate Gauravvardhan AS Nadkarni appeared for the Petitioner, while Standing Counsel Amira Razaq represented the Respondents.
Brief Facts
The issue in the Writ Petition was the legality of the re-opening of proceedings initiated against the Petitioner. The Petitioner had originally filed his return of income for AY 2013-14 on 31/03/2014, declaring an income. His case was later selected for scrutiny by issuance of notice under Section 143(2) of the IT Act, and the assessment was completed on 23/02/2016, with an assessed income of Rs. 60,60,370/.
The Petitioner filed objections contending that the reassessment notice was time barred under Section 149 of the IT Act, as amended by the Finance Act, 2021. The Petitioner also argued that the order under Section 148A(d) of the IT Act was passed without proper application of mind and in violation of principles of natural justice.
Court’s Reasoning
The High Court held, “The timeline under Section 148A(d) is for the Assessing Officer to comply with the stipulations and the streamlining contemplated under Section 148A. This is primarily to bring in transparency and accountability into the system and is intended for the benefit of the assessees. However to suggest that Section 148A(d) extends the time limit under Section 149(1) and/or has a bearing on the time under Section 149(1) is a submission which is misconceived and lacks legal sanctity.”
The Bench held that the notice issued under Section 148 of the IT Act was beyond the time period specified under Section 149.
Consequently, the Court ordered, “For all these reasons, we hold that the notice dated 29/07/2022, issued by Respondent no.1 under Section 148 of the IT Act is beyond the time period specified under Section 149(1) of the IT Act. It is therefore quashed. Consequently, the impugned assessment order dated 29/05/2023 passed on the basis of the impugned notice also stands quashed and set aside. Rule is made absolute in aforesaid terms with no order as to costs.”
Accordingly, the High Court rejected the Petition.
Cause Title: Gurpreet Singh v. Deputy Commissioner of Income Tax & Ors. (Neutral Citation: 2025:BHC-GOA:868-DB)
Appearance:
Petitioner: Advocates Mayur Khandeparkar, Anand Pai, Mahesh R. Mishra and Arun
Respondents: Senior Advocate Narendra Walavalkar; Advocates Rahul Soman, Vidya Vyavhare, Pallavi Khale and Komal Punjabi