Reassessment Order Invalidates When Section 148 Notice Is Issued Beyond Survival Period: ITAT

The ITAT Delhi has quashed the entire reassessment proceedings initiated based on the Section 148 notice against Vedanta Limited, noting the impugned notice was barred by limitation.

The assessee, Vedanta Limited, had claimed that the Section 148 notice dated July 29, 2022, was barred by limitation because it was issued beyond the survival period of one day + 7 days as prescribed under Section 148A(d) of the Act. In the present case, the survival period had already expired on July 25, 2022, and the notice was issued on July 29, 2022. Consequently, the tax proceedings initiated based on the Section 148 notice were invalid as per the law and liable to be set aside.

The assessee had claimed that “the notice dated 29.07.2022 issued u/s.148 of the Act is barred by limitation for the reason that the same is issued Page | 2 beyond the survival period as per the decision of the Hon’ble Delhi High Court in the case of Ram Balram Build Home Pvt. Ltd. Vs. ITO (447 ITR 133) and the decision of the Hon’ble Supreme Court in the case of Union of India Vs. Ashish Aggarwal (444 ITR 1).”

In support of the aforementioned claim, the assessee also cited earlier judgements of the Honourable Delhi High Court in the case titled Ram Balram Build Home Private Limited Vs ITO and the decision of the Honourable Supreme Court in the case titled Union of India Vs. Ashish Aggarwal.

When the case was taken before the ITAT Delhi, the tribunal examined the events and noted that the Tax Department could not effectively dispute the facts and calculations presented by the assessee. Relying on the above judicial precedents, the ITAT concluded that the impugned notice issued under Section 148 was indeed beyond the limitation period and hence invalid in law.

Consequently, the reassessment order passed based on the same notice was declared void ab initio, meaning it was treated as invalid from the beginning. The Tribunal allowed Vedanta’s legal ground challenging the reassessment. Since the reassessment proceedings were quashed on the legal issue of limitation, the Tribunal did not examine the merits of the tax additions or other grounds raised in the appeal. Those issues were left open. The appeal was thus partly allowed.