ITAT Invalidates Entire Reassessment Proceedings After Issuance of Section 148 Notice After Statutory Time Limit Prescribed Under Law:

The ITAT Ahmedabad Bench invalidated the Section 148 notice as barred by limitation because it was issued after the statutory time limit prescribed by law. The maximum time limit to issue the notice was April 19, 2023; however, the notice was issued on April 20, 2023. Accordingly, the notice was one day delayed.

Anish Thakore (assessee) had filed his income tax return (ITR), declaring an aggregate income of Rs 3.74 lakh for the Assessment Year 2019-20. During the year under consideration, the assessee had claimed a deduction on a donation of Rs 53,000. In connection of the same, tax proceedings were initiated against the assessee and in context of the same a notice dated April 20, 2023, was served to the assessee under section 148 of the Income Tax Act. The Assessing Officer (AO) completed the assessment, determining the total income at Rs 4.27 lakh after disallowing the deduction.

The aggrieved assessee challenged the validity of the Section 148 notice on the ground of limitation under section 149 of the Act, before the Income Tax Appellate Tribunal (ITAT), Ahmedabad. When the tribunal analysed the facts of the case, it noted that the escaped income in question is merely Rs 53,000, and the reassessment notice under Section 148 was issued on April 20, 2023.

The Tribunal held that "even after considering the period available to the assessee for responding to the notice under section 148A(b), as recorded by the Ld. CIT(A), the limitation stood extended only up to 19.04.2023, whereas the notice under section 148 was issued after that date."

Correspondingly, the Tribunal held that the impugned Section 148 notice was indeed barred by limitation and consequently was invalid as per the law. Accordingly, the Tribunal set aside the impugned notice dated April 20, 2023, issued under Section 148, and the reassessment order dated March 17, 2025, passed under Section 147 read with Section 144 B.

In conclusion, the assessee's appeal was allowed.