Notice under Section 148 deemed illegal and invalid due to limitation period expiry

The ITAT Kolkata held that a notice issued under section 148 of the Income Tax Act for assessment year 2009-10 was barred by limitation and therefore illegal and without jurisdiction. Following the precedent set by the Madras HC in Smt. Parveen Amin Bhathara case, the tribunal found the notice was issued beyond the permissible time limit prescribed under the Act. The assessee's appeal was allowed, and the impugned notice was deemed invalid.

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Issues Involved:
1. Validity of the re-assessment order u/s 144/147.
2. Issuance of notice u/s 148 beyond the permissible time limit.
3. Addition of Rs. 10,19,518/- on account of alleged bogus loss.

Summary:

1. Validity of the re-assessment order u/s 144/147:
The assessee contended that the re-assessment order dated 26.12.2016 framed u/s 144/147 is void and nullity as it is barred by limitation. The main grievance was that the notice u/s 148 was issued after the expiry of six years from the end of the relevant assessment year, making the re-assessment proceedings invalid.

2. Issuance of notice u/s 148 beyond the permissible time limit:
The notice u/s 148 dated 31.03.2016 was handed over to the speed post authority on 04.04.2016 and received by the assessee on 05.04.2016. The Tribunal referred to the judgement of the Hon'ble Madras High Court in the case of Smt. Parveen Amin Bhathara vs ITO, which held that the issuance of notice under section 149 is complete only when it is sent to the proper person within the end of the relevant assessment year. The Tribunal concluded that the notice in the present case was beyond the permissible time limit as prescribed under the Act and thus, illegal and without jurisdiction.

3. Addition of Rs. 10,19,518/- on account of alleged bogus loss:
Since the Tribunal found the notice u/s 148 to be beyond the permissible time limit, it quashed all consequential actions taken by the authorities below, including the addition of Rs. 10,19,518/- made by the AO on account of alleged bogus loss. The remaining grounds challenging the order were rendered academic and were not adjudicated.

Conclusion:
The appeal of the assessee was allowed, and the impugned notice and all consequential actions were quashed and set aside. The order was pronounced in the open court on 05.10.2023.

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