Issued under Consideration:
Whether notice for reopening of cases on the basis of finding of tribunal, after expiry of 6 years limitation from the relevant AY in which the income was first assessable, is a valid notice.
Provision Applicable:
Generally notice u/s 148 can be issued within 4 years from the end of Relevant AY but if income escaped amount or likely to escape is more than 1,00,000. Notice can be issued within 6 years from the relevant AY in which the income is first assessable. If income escaped is related to foreign asset then notice can be issued up to 16 years from end of the relevant AY.
Conclusion
As per recent judgment issued by ITAT-Jaipur, it has been found that where CIT (A) has passed the order, on which date the limitation of 6 years given u/s 150 has already expired, Reassessment of those years just to give effect of direction of tribunal is not valid. In the given case, decision was in the favour of revenue where notice of reassessment was barred by the time limitation u/s 149 read with 150(2). Since the reopening is barred by limitation therefore the consequent reassessment even on the basis of finding of tribunal, is not sustainable and it will be quashed. Hence notice issued will be void.
Note – Please note that the above article is for education purpose only. This is based on our interpretation of laws which may differ person to person. Readers are expected to verify the facts and laws.
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