2024 (7) TMI 970 - HC - Income Tax

Reassessment notice for 2015-16 quashed due to section 148 limitation period violation following Hexaware precedent

The Bombay HC quashed a reassessment notice dated 19 July 2022 for assessment year 2015-16, finding it invalid under the limitation period provisions of ... Validity of reassessment proceedings - period of limitation - time limit to issue notice u/s 148 - HELD THAT:- Admittedly, in the present case the impugned notice is dated 19 July 2022 which is for the assessment year 2015-16. Adverting to what has been held by the Division Bench of this Court in Hexaware Technology Ltd. [2024 (5) TMI 302 - BOMBAY HIGH COURT] the notice for such reason certainly would not satisfy the test of law, accordingly, it would be required to be quashed and set aside. Decided in favour of assessee. Issues:Challenge to notice dated 19 July 2022 under Section 148 of the Income Tax Act, 1961 for the assessment year 2015-16. Petition seeking writs of Certiorari, Mandamus, and direction under Article 226 of the Constitution of India to quash the impugned notice and order.Analysis:The petition challenged a notice dated 19 July 2022 issued under Section 148 of the Income Tax Act, 1961 for the assessment year 2015-16. The petitioner sought various writs, including Certiorari and Mandamus, to quash the notice and related orders. The petitioner argued that the notice was beyond the prescribed limitation under Section 149 of the Act. Reference was made to the decision in Hexaware Technology Ltd. case, where it was held that notices issued beyond the time limit specified under Section 149 were invalid. The Court noted that the impugned notice in this case was issued on 19 July 2022, which was beyond the limitation period, and therefore, it needed to be quashed.The Division Bench's decision in the Hexaware Technology Ltd. case was pivotal in determining the validity of the notice. The Court emphasized that the first proviso to Section 149 of the Act prohibited the issuance of notices beyond the time limit specified under the Act. The Court highlighted that the purpose of the proviso was to apply the period of limitation as per the provisions in force at the relevant time. It was observed that the interpretation suggested by the Revenue would render the proviso redundant and contrary to the plain language of the statute. The Court concluded that the impugned notice, being issued beyond the limitation period, was not sustainable, and therefore, the petition was allowed in favor of the petitioner.In light of the arguments presented and the precedents cited, the Court found merit in the petitioner's contentions and ruled in their favor. The Court held that the impugned notice dated 19 July 2022 for the assessment year 2015-16 was invalid due to being issued beyond the prescribed limitation period. The petition was allowed, and the Court quashed the notice in accordance with the prayers sought by the petitioner. The rule was made absolute, and no costs were awarded in this matter.