2026 (5) TMI 1820

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.... given by the first notice was beyond 31.03.2024, the proceedings are void. In this regard, learned senior counsel for the petitioners gave relevant dates which are noted hereinunder in tabular form: DATE PARTICULARS 29.03.2024 Notice u/s 148A(b) was issued by AO, giving time till 08.04.2024 to file the reply, the initial time so given went beyond 31.03.2024 i.e. beyond period of limitation (not a case of search). 08.04.2024 Request for adjournment. 08.04.2024 Fresh notice of hearing was issued by AO granting time till 12.04.2024. 12.04.2024 The petitioner again sought adjournment. 21.04.2024 Reply was filed by petitioner contending that the impugned reassessment proceedings are barred by limitation as per first proviso to section 149(1) of the Act. 30.04.2024 The order came to be passed by the AO u/s 148A(d) of the Act. 30.04.2024 Notice u/s 148 of the Act was issued by the AO. 3. Learned senior counsel submitted that as per the applicable provisions of the Act of 1961, a notice under Section 148 could be issued within six years of the end of the assessment year and emphasised that the outer limit for issuing notice under Section ....

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.... and sixth proviso cannot be granted to the respondents. 9. Learned senior counsel submitted that if the judgment in the case of BKR Capital Private Limited (supra) is read in its entirety, more particularly paras 7 and 15, it is clear that this Court has held the proceeding to be valid in facts peculiar to that case. 10. For the sake of ready reference, para 15 of the judgment in the case of BKR Capital Private Limited (supra) is reproduced hereunder: "15. It is not in dispute that, under the then prevailing provisions of Section 149 of the Act of 1961, the normal period for limitation for issuance of notice under section 148 of the Act of 1961 expired on 31.03.2024. It is also not in dispute that prior to such date, the AO had issued notice (on 21.03.2024) under Section 148A(b), calling upon the petitioner to file its reply by 28.03.2024. Therefore, the proceedings were initiated within the limitation period." 11. Learned senior counsel relied upon the judgment of Rajasthan High Court in the case of Shree Cement Limited v. Assistant Commissioner of Income Tax, reported in 177 taxman.com 535 (Raj), judgment of Bombay High Court rendered in Hexaware Technologies L....

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....rns out to be a misconception. Because, while providing for the opportunity of hearing to an assessee under clause (b) of Section 148A, the parliament thought it fit to accord an opportunity of minimum seven days and a maximum of 30 days for an assessee to file reply. We are firmly of the view that simply because on 29.03.2024, 7 days' time was not available, the proceeding cannot be alleged to be vitiated. Because 7 days' time is not the maximum time allowable for filing reply. In a given case it can extend to 30 days. 18. According to us, if the intention of the Parliament was not to extend the limitation period for the time elapsed in filing the reply, then they would certainly have provided separate limitation for issuance of notice under Section 148A(b) of the Act of 1961. But instead of doing so, the Fifth proviso has been stringed/appended with Section 149, which stipulates that the time taken for filing the reply shall be excluded from the limitation period. It will not be out of place to reproduce Section 149 with fifth and sixth proviso, which would read as under: "Section 149 (As substituted by the Finance Act of 2021)  "149. Time limit for noti....

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....h financial year: Provided also that where the information as referred to in Explanation 1 to section 148 emanates from a statement recorded or documents impounded under section 131 or section 133A, as the case may be, on or before the 31st day of March of a financial year, in consequence of,- (a) a search under section 132 which is initiated; or (b) a search under section 132 for which the last of authorisations is executed; or (c) a requisition made under section 132A, after the 15th day of March of such financial year, a period of fifteen days shall be excluded for the purpose of computing the period of limitation as per this section and the notice issued under clause (b) of section 148A in such case shall be deemed to have been issued on the 31st day of March of such financial year: Provided also that for the purposes of computing the period of limitation as per this section, the time or extended time allowed to the assessee, as per show-cause notice issued under clause (b) of section 148A or the period during which the proceeding under section 148A is stayed by an order or injunction of any court, shall be excluded: Provide....