Case Note & Summary
The petitioner, a major partner of PSY Group engaged in real estate business, challenged a notice dated 27.03.2025 issued under Section 148 of the Income Tax Act, 1961 seeking to reopen income tax assessment for Assessment Year 2014-15. The petitioner and associated groups were subjected to a search action under Section 132 of the Act on 08.02.2024, during which incriminating material was found suggesting unaccounted transactions. The petitioner challenged the notice primarily on the ground of limitation, arguing that it was issued beyond the permissible period under Section 149(1)(b) of the Act. The court examined the limitation provisions and noted that for reassessment beyond four years but within six years from the end of the relevant assessment year, the escaped income must be in relation to any asset exceeding Rs. 50 lakhs. Since the assessment year ended on 31.03.2015, the six-year period expired on 31.03.2021, but the notice was issued on 27.03.2025, which is clearly beyond that period. The court observed that the satisfaction note did not specify that the escaped income pertained to any asset of value exceeding Rs. 50 lakhs, nor did it quantify any such asset. Therefore, the extended limitation period under Section 149(1)(b) was not attracted. The court held that the notice was barred by limitation and quashed it, allowing the petition.
Headnote
A) Income Tax - Reassessment - Limitation - Section 149(1)(b) of Income Tax Act, 1961 - Notice under Section 148 issued on 27.03.2025 for AY 2014-15 challenged as time-barred - Court held that the extended limitation period of six years from end of assessment year applies only if escaped income is in relation to any asset exceeding Rs. 50 lakhs - Satisfaction note did not specify value of asset or that escaped income related to such asset - Notice issued beyond six years from end of AY 2014-15 (31.03.2015) is barred by limitation - Held that the notice is invalid and quashed (Paras 3-10).
Issue of Consideration
Whether the notice under Section 148 of the Income Tax Act, 1961 for reopening assessment for AY 2014-15 is barred by limitation under Section 149(1)(b) of the Act?
Final Decision
The court quashed the notice dated 27.03.2025 issued under Section 148 of the Income Tax Act, 1961 for Assessment Year 2014-15, holding it to be barred by limitation under Section 149(1)(b) of the Act. The petition was allowed.
Law Points
- Limitation for reassessment under Section 149(1)(b) of Income Tax Act
- 1961
- Reopening beyond six years from end of assessment year invalid unless escaped income relates to asset exceeding Rs. 50 lakhs
- Satisfaction note must specify value of asset for extended limitation period
