TaxTMI 
TaxTMI 
2025 (9) TMI 1767
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.... (briefly 'the Act' hereinafter), the order dated 16.04.2024 issued under Section 148A(d) of the Act, and also the show-cause notice dated 31.03.2024 issued under Section 148A(b) of the Act. 3. The primary contention on behalf of the petitioner while assailing the impugned order and the show-cause notices was: i. That the impugned proceedings initiated is without jurisdiction; ii. That the impugned proceedings and the order under challenge is otherwise barred by limitation; and iii. That the impugned order and the show-cause notices issued are in blatant violation of the principles of natural justice and also in violation of Article 14 and 19(1)(g) of the Constitution of India. 4. The facts of the case in nutshell, are that, the petitioner M/s. Sri Sai Dhurga Balaji Health and Educational Welfare Society, which is a society registered under the Societies Registration Act received a show-cause notice dated 31.03.2024 under Section 148A(b) of the Act from respondent No.1 through e-mail regarding reopening of assessment for the assessment year 2017-18 stating that based on information received, M/s. Andhra Pradesh State Financial Corporation had writte....
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.... This timeline is mandated by law and leaves no room for discretionary extensions. However, the Department issued the impugned notice on 16.04.2024, which is clearly beyond the statutory limitation period of six years prescribed under Section 149(1)(b) of the Act. This delay of even a few days renders the notice void ab initio as the Department had no jurisdiction to issue notices beyond the limitation period. 7. According to the learned counsel for the petitioner, the principles of limitation are founded on public policy promoting diligence and preventing injustice. According to him, the Hon'ble Supreme Court also in numerous judgments has emphasized that limitation periods are not mere technicalities but substantive provisions that affect the jurisdiction of authorities. Therefore, the notice under Section 148 of the Act dated 16.04.2024 being barred by limitation is legally invalid and all subsequent proceedings and orders stemming from this time-barred notice are liable to be set aside. 8. Learned counsel for the petitioner contended that the Department has not provided any justification for the delay in issuing the notice beyond the limitation period. The law also do....
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....s of natural justice in the present case. He details that upon receiving the show-cause notice dated 31.03.2024, under Section 148A(b) of the Act, the Secretary of the petitioner society was unwell, and the notice only came to the Secretary's attention on 16.04.2024. Acting promptly, he sent an email at 02:33 P.M. and submitted a letter on 16.04.2024 to respondent No.1, seeking an adjournment for filing a reply. However, without considering or even acknowledging these communications, respondent No.1 proceeded to pass the impugned order at 08:55 P.M. and issued the notice at 09:10 P.M. on the same day. Learned counsel for the petitioner contends that this conduct of respondent No.1 is arbitrary, unreasonable, and in complete disregard of the fundamental principles of fair play and natural justice and emphasized that the right to be heard is a sacrosanct principle of natural justice that cannot be by passed or ignored by any authority, including the Income Tax Department. 14. Learned counsel for the petitioner further contended that Department's failure to respond to the adjournment request before proceeding with the assessment constitutes a serious procedural impropriety. Rel....
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....earned Senior Standing Counsel emphasized that if the society is run by just one individual, it would not qualify as an Association of Persons under the Act. 18. Learned Senior Standing Counsel for the Income Tax Department further cited Section 149 of the Act which stipulates that "for computing the period for limitation for issuance of a notice under Section 148 of the Act, the time or extended time allowed to the assessee shall be excluded." As the petitioner was given 12 days (from 01.04.2024 to 12.04.2024) to respond to the show-cause notice, this period should be excluded when calculating the limitation period. Furthermore, where the remaining period available to the Assessing Officer does not exceed seven days, such period shall be extended to seven days. 19. Learned Senior Standing Counsel for the Income Tax Department contended that since the notice was issued beyond the 6 year limitation period, the Department maintains that all notices were issued within the time stipulated under Section 149 of the Act. The Department obtained approval from the competent authority on 16.04.2024 and subsequently passed the order under Section 148A(d) of the Act and issued notice und....
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....son on whom a notice under section 148 is to be served is a person treated as the agent of a non-resident under section 163 and the assessment, reassessment or recomputation to be made in pursuance of the notice is to be made on him as the agent of such non-resident, the notice shall not be issued after the expiry of a period of six years from the end of the relevant assessment year." 22. Taking into consideration the statutory position as it stood then, i.e. prior to 01.04.2021, the period of limitation prescribed under Section 149(1) was four years from the end of the relevant assessment year. Now the only exception that stands carved out is that which is reflected in clause (b) and (c) above, and it is not the case of the Revenue that the case of the petitioner / assessee falls under any of the two clauses. 23. The aforesaid provision of Section 149(1) subsequently stood amended w.e.f. 01.04.2021 by way of the Finance Act, 2021. The amended provision of Section 149(1) reads as under: "(a) if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b); (b) if three years, but not more than ten years, have e....
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....gime. Thus, a notice could be issued under section 148 of the new regime for the assessment year 2021-22 and before if the time limit for issuance of such notice continued to exist under section 149(1)(b) of the old regime. 48. Notices have to be judged according to the law existing on the date the notice is issued. Section 149 of the old regime primarily provided two time limits : (i) four years for all situations ; and (ii) beyond four years and within six years if the income chargeable to tax which escaped assessment amounted to rupees one lakh or more. After April 1, 2021, the time limits of four years was reduced to three years. Therefore, in all situations, re-assessment notices could be issued under the new regime if not more than three years have elapsed from the end of the relevant assessment year. For example, for the assessment year 2018-19, the four-year period would have expired on March 31, 2023 under the old regime. However, if the notice is issued after April 1, 2021, the three-year time limit prescribed under the new regime will be applicable. The three-year time limit will expire on March 31, 2022. 50. Another important change under section 149(1....
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....rected as the terminal point which when crossed would have rendered the initiation of reassessment impermissible in law. 14. Viewed in light of the above, the impugned notice when tested on the anvil of the pre-amendment Section 149 (1) (b) in order to be sustained would have to meet the prescription of six years. Undisputedly that period in respect of AY 2016-17 came to an end on 31 March 2023. We thus find ourselves unable to sustain the impugned action of reassessment and which was commenced pursuant to the notice dated 29 April 2024." 27. From the plain reading of the aforesaid judicial precedents and when we look into the relevant dates in the present case, the assessment year being 2017-18 and the show-cause notice being issued only on 31.03.2024, it clearly indicates that under both the pre-amendment and post-amendment to Section 149(1) the limitation would be either three years or four years which in the instant case admittedly has not been adhered to. Further, the notice has been issued much after the prescribed period of limitation. Further, it also gives a clear indication that though the assessment year being 2017-18 and end of the relevant assessment year i....