In The Hisar Leading Bank Co-Op Non-Agri Thrift & Credit Society, Hisar v. Income Tax Officer, Ward-1, Hisar, the Delhi Bench of the Income Tax Appellate Tribunal examined the legality of reassessment proceedings initiated for Assessment Year 2014–15 under Sections 147 and 148 of the Income-tax Act, 1961.

The Tribunal noted that the original six-year limitation period for issuance of notice under Section 148 expired on 31.03.2021. Although an initial notice under the old regime was issued on 21.06.2021 and later treated as a deemed notice under Section 148A(b) pursuant to the Supreme Court judgment in Union of India v. Ashish Agarwal, the final notice under Section 148 was issued only on 27.07.2022.

Relying extensively on the authoritative judgment of the Hon’ble Supreme Court in Union of India v. Rajeev Bansal, the Tribunal held that the benefit of extended timelines under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 could not revive reassessment proceedings that were already time-barred under the unamended provisions. The Tribunal observed that only the balance time surviving as on 30.06.2021 could be utilised by the Revenue, and in the present case, the notice issued on 27.07.2022 was clearly beyond the permissible period.

The Tribunal further held that once the jurisdictional notice under Section 148 itself is barred by limitation, the consequential order under Section 148A(d) and the assessment framed under Section 147 read with Section 144B are rendered void ab initio. Accordingly, the entire reassessment proceedings were quashed without going into the merits of the addition made under Sections 68 and 115BBE.

The appeal of the assessee was thus allowed in full on the legal ground of limitation.

Source Link- https://itat.gov.in/public/files/upload/1767784850-z9RJFx-1-TO.pdf

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