The reopening of assessment notice under Section 148 is barred by limitation if issued beyond the established time frame as per amended Section 149.

ORDER : 

Heard Mr. T. Suryanarayana, learned Senior Counsel representing Ms. K. Srilatha, learned counsel for petitioner and Ms. Bokaro Sapna Reddy, learned Senior Standing Counsel for Income Tax Department appearing for respondents.

2. Notice under Section 148 of the Income-tax Act, 1961 (for short ‘the Act’) dated 22.04.2024 and order passed under Section 148 A(d) of the Act also dated 22.04.2024, are under challenge in the instant Writ Petition.

3. The matter relates to the Assessment Year 2017-18. An Assessment Order in respect of the petitioner’s return of income was passed by the Income Tax Officer, Ward 1(1), Hyderabad, on 20.12.2019 making additions under Section 68 of the Act. Thereafter, the Income Tax Officer passed an order dated 23.12.2019 under Section 154 of the Act read with Section 143(3) of the Act rectifying a typographical error in the Assessment Order wherein an adjustment of Rs.40,00,00,000/- was erroneously mentioned as Rs.40,00,000/-. Subsequently, another notice under Section 154 of the Act dated 20.01.2022 was issued by respondent No.1 for rectification of the order dated 23.12.2019 for correction of a mistake apparent on record. The mistake proposed to be rectified was Rs.40.00 lac as against Rs.40.00 crore in the computation of total income. Therefore, there was short addition of Rs.39,60,00,000/-. The Assessment Officer had not made disallowance of Rs.6,35,949/- under Section 36 (1)(va) of the Act with respect to non-payment of contribution to the Provident Fund within the due dates prescribed under the Act. The Assessment Officer had not verified the genuineness of the additions to the block of assets. Therefore, the depreciation claim of Rs.78,26,412/- was not allowed. It was to be added to the total income of the petitioner. The petitioner filed its objections on 22.02.2022. A notice dated 12.12.2022 was further issued calling upon the petitioner to furnish the details of the invoices wherein the amounts were exceeded Rs.1,00,000/- towards additions made to the fixed assets for the Assessment Year 2017-18. According to it, the petitioner filed its response on 15.12.2022 providing the details of the fixed assets wherein the amount exceeds Rs.1.00 lac towards addition made in respect thereof. According to the petitioner, no further proceedings took place and no further orders have been passed in the proceedings under Section 154 of the Act, thereby, the proceedings are deemed to be dropped.

4. On 26.03.2024, notice under Section 148A(b) of the Act was issued on the following points:

a) that during the course of audit review, it was found that the petitioner had not paid the employees contribution to the Provident Fund amounting to Rs.6,35,949/- within the due dates. Therefore, the same is to be disallowed under Section 36 (1)(va) of the Act, and

b) that the petitioner had not given details and supporting evidences about the additions to the block of assets.

5. It also stated that the Assessing Officer had not verified the genuineness of the additions to the block of assets. Therefore, the depreciation of Rs.78,26,412/- was not allowed. The petitioner filed its response on 18.04.2024 objecting to the initiation of re-assessment proceedings. Respondent No.1 proceeded to pass an order under Section 148 A(d) of the Act on 22.04.2024 holding it to be a fit case for issuance of notice under Section 148 of the Act since there was audit objection. Consequently, the notice under Section 148 of the Act proposing to re-assess the petitioner’s income for the Assessment Year 2017-18 was issued on 22.04.2024. Therefore, the impugned order under Section 148 A(d) and n