Case Note & Summary
The petitioner, Manojbhai Bhupatbhai Vadodaria, filed a writ petition challenging a notice under Section 148 of the Income Tax Act, 1961 for Assessment Year 2012-13, issued on 24.02.2023. A search and seizure operation under Section 132 was conducted on 08.09.2021 on Sambhaav and its key associations. The petitioner raised preliminary objections on 19.05.2023, but the respondent did not pass a speaking order disposing of those objections. The petitioner argued that the notice was barred by limitation under Section 149 read with Section 153A(1)(b) and Explanation 1 to Section 153A. The court examined the interplay between Section 149 (which allows reopening up to six years from the end of the relevant assessment year) and Section 153A (which deals with assessments in search cases). The court held that the 'relevant assessment year' under Explanation 1 to Section 153A is the assessment year preceding the assessment year relevant to the previous year in which the search is carried out. For a search on 08.09.2021, the relevant assessment year is AY 2022-23, and the preceding year is AY 2021-22. The notice for AY 2012-13 was issued beyond six years from the end of that assessment year (31.03.2013), i.e., after 31.03.2019. Therefore, the notice was barred by limitation. The court allowed the petition and quashed the impugned notice.
Headnote
A) Income Tax - Reopening of Assessment - Limitation - Section 148, Section 149, Section 153A, Explanation 1 to Section 153A, Income Tax Act, 1961 - The petitioner challenged a notice under Section 148 for AY 2012-13 issued on 24.02.2023, following a search under Section 132 on 08.09.2021. The court held that the 'relevant assessment year' under Explanation 1 to Section 153A is the assessment year preceding the year of search, i.e., AY 2021-22. Since the notice was issued beyond six years from the end of AY 2012-13 (i.e., after 31.03.2019), it was barred by limitation under Section 149. The court quashed the notice. (Paras 1-14) B) Income Tax - Search and Seizure - Relevant Assessment Year - Explanation 1 to Section 153A, Income Tax Act, 1961 - The court interpreted 'relevant assessment year' as the assessment year relevant to the previous year in which search is conducted. For a search on 08.09.2021, the relevant assessment year is AY 2022-23, and the preceding year is AY 2021-22. The six-year limitation under Section 149 applies from the end of the assessment year sought to be reopened. (Paras 5-10)
Issue of Consideration
Whether the notice under Section 148 of the Income Tax Act, 1961 for Assessment Year 2012-13 issued on 24.02.2023 is barred by limitation in light of Section 149 read with Section 153A(1)(b) and Explanation 1 to Section 153A of the Act.
Final Decision
The court allowed the petition and quashed the impugned notice under Section 148 dated 24.02.2023 for Assessment Year 2012-13, holding it to be barred by limitation.
Law Points
- Limitation for reopening assessment under Section 148 after search
- Interpretation of 'relevant assessment year' under Section 153A Explanation 1
- Applicability of Section 149 time limit in search cases
