JUDGMENT :

(P.S. Dinesh Kumar, J.)

This appeal by the Revenue challenging the order dated 19.07.2019 in ITA No.585/Bang/2019 passed by the Income Tax Appellate Tribunal, Bangalore, has been admitted to consider following questions of law:

"1. Whether on the facts and circumstances of the case, the Tribunal was right in holding that reassessment order in void-ab-initio on the ground that there were two parallel assessment proceedings pending when there was only one at the time of passing the reassessment order and was well in accordance with parameters of section 148 and 149 of the Income Tax Act, 1961?

2. Whether on the facts and circumstances of the case, the Tribunal was correct in setting aside the reassessment order by ignoring the fact that the first reassessment proceedings initiated on 18-42013 was barred by limitation on 31-122014 and the said reassessment proceedings got initiated only on 31-3-2015 and hence, both are distinct and not parallel?

2. Heard Shri.E.I.Sanmathi, learned standing counsel for the Revenue and Shri.B.R.Sudheendra, learned Advocate for the assessee.

3. Undisputed facts of the case are, assessee filed return of income for the Assessment Year 2008-09 on 30.09.2008. Assessment under section 143(3) of the INCOME TAX ACT , 1961 was completed on 12.05.2010. The Assessing Officer issued notice under Section 148 of the Act dated 18.04.2013. Pursuant thereto no action was taken.

4. Second notice was issued under Section 148 of the Act on 31.03.2015. The assessee contested the said notice and assessment order has been passed under Section 143 r/w Section 147 of the Act, wherein the AO has disallowed some exemptions. The Commissioner of Income Tax (Appeals) has confirmed AO's order and ITAT has set aside the AO's order and allowed the appeal.

5. Shri.Sanmathi assailing ITAT's order submitted that pursuant to first notice dated 18.04.2013 issued under Section 148 of the Act, the last date to complete the assessment was 31.12.2014. No action was taken pursuant to said notice because assessee did not file his return of income. The AO has rightly issued second notice within six years from the date of end of A.Y. and no parallel proceedings were neither pending nor initiated. Therefore, impugned order is unsustainable and accordingly, prayed for allowing this appeal.

6. Shri.Sudheendra adverting to Section 153(2) of the Act, as it stood prior to amendment relevant for A.Y. 2008-09, pointed out that the time limit expires on 31.03.2015. The AO has neither withdrawn the first notice nor completed the proceedings before the expiry of time. Therefore, second notice was unsustainable in law.

7. We have carefully considered the rival contentions and perused the records.

8. Sub-section (2) of Section 153 of the Act as it stood prior to amendment, relevant to A.Y. 2008-09 reads as under:

"(2) No order of assessment, reassessment or recomputation shall be made under section 147 after the expiry of one year from the end of the financial year in which the notice under section 148 was served:"

9. Thus, no assessment order could be passed after expiry of one year from the end of Financial Year. In the case on hand, the notice has been issued on 18.04.2013. The end of F.Y. shall be 31.03.2014 and one year there-from would expire on 31.03.2015. Thus, the AO had time till 31.03.2015 to complete the proceedings.

10. The ITAT relying upon the decision of Hon'ble Gujarat High Court rendered in Marwadi Shares & Finance Ltd. v. DCIT [2018] 94 Taxmann.com 398 (Guj) [para 17 and 18] has allowed the appeal. The Hon'ble Gujarat High Court has held in the said case that when the first no