Case Note & Summary
The petitioner, Popular Developers, a partnership firm engaged in real estate business, filed its return of income for Assessment Year 2011-12 on 29.07.2011 declaring total income of Rs.61,719/-. A search under Section 132 of the Income-tax Act, 1961 was conducted on 08.10.2020. Subsequently, on 11.03.2022, the respondent issued a notice under Section 153A of the Act for the same assessment year. The petitioner filed a return in response on 25.03.2022 declaring income of Rs.64,260/-. Notices under Section 142(1) were issued, and the petitioner provided details. However, on 31.03.2022, the Assessing Officer passed an order making an addition of Rs.8,65,02,100/-. The petitioner challenged both the notice and the assessment order. The primary legal issue was whether the notice under Section 153A was barred by limitation. The petitioner argued that under Section 153A(1)(b) read with Explanation 1, the notice could only be issued within six years from the end of the relevant assessment year, i.e., by 31.03.2018. The respondent contended that the limitation period should be computed from the date of search. The court analyzed the provisions and held that Explanation 1 to Section 153A clearly provides that the period of limitation for issuing a notice under Section 153A is six years from the end of the assessment year relevant to the previous year in which the search was conducted. Since the search was in 2020-21, the relevant assessment year is 2021-22, and the six-year period for Assessment Year 2011-12 had already expired. The court quashed the notice and the consequential assessment order, allowing the petition.
Headnote
A) Income Tax - Limitation for Search Assessment - Section 153A(1)(b) read with Explanation 1 - Notice under Section 153A for Assessment Year 2011-12 issued on 11.03.2022 - Search conducted on 08.10.2020 - As per Explanation 1, the period of limitation for issuing notice is six years from the end of the relevant assessment year - Assessment Year 2011-12 ended on 31.03.2012 - Six years expired on 31.03.2018 - Notice issued on 11.03.2022 is beyond limitation - Held that the notice is time-barred and liable to be quashed (Paras 1-5).
Issue of Consideration
Whether the notice dated 11.03.2022 issued under Section 153A of the Income-tax Act, 1961 for Assessment Year 2011-12 is barred by limitation under Section 153A(1)(b) read with Explanation 1 to Section 153A.
Final Decision
The court quashed the notice dated 11.03.2022 under Section 153A and the consequential assessment order dated 31.03.2022, allowing the writ petition.
Law Points
- Limitation period for issuance of notice under Section 153A
- Section 153A(1)(b) read with Explanation 1
- time-barred notice
- search assessment
