Notices issued under section 148 beyond statutory time limits are invalid; compliance with jurisdictional facts is essential for lawful reassessment.

ORDER

PER ABY T. VARKEY, JM:

These appeals preferred by the assessee and the Revenue are against the order of the Learned Commissioner of Income Tax (Appeals)- 19, (hereinafter referred to as ‘Ld.CIT(A)‘), Chennai, dated 12.02.2025 & 20.02.2025 for the Assessment Years (hereinafter referred to as ‘AY‘) 2013-14 to 2016-17 u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act‘).

2. Briefly stated the facts of the case are that, the assessee is a private limited company which is engaged in the business of manufacturing and sale of Indian made foreign liquor. A search u/s 132 of the Act was conducted upon the assessee on 15-06-2022, in the course of which several material viz., books of accounts, documents & electronic data, loose sheets, note books etc. was found and seized. According to the Revenue, the seized material inter alia contained details of suppression of income by the assessee by debiting bogus purchases from vendors of old liquor bottles and transportation & logistics services. Consequently, the case of the assessee was reopened and notice(s) u/s 148 of the Act dated 30-03-2023 was issued to the assessee for the relevant AYs 2013-14 to 2016-17. The details of the return(s) of income filed in response to notice u/s 148 of the Act and the subsequent re- assessment(s) completed by order(s) all dated 15-03-2024 passed u/s 143(3)/147 of the Act are as under: - Aggrieved by the above order(s), the assessee preferred appeal(s) before the Ld. CIT(A).

3. Before the Ld. CIT(A), the assessee had inter alia challenged the validity of the initiation of reassessment proceedings u/s 147 of the Act for the impugned AYs 2013-14 to 2016-17 which was allowed by the Ld. CIT(A) and accordingly the re-assessment orders passed u/s 147/143(3) of the Act was quashed. Being aggrieved by the appellate order(s) of the Ld. CIT(A), the Revenue is now in appeal before us. The assessee in their appeal(s) is noted to have assailed the Ld. CIT(A)’s order on other legal issues and the merits of the addition(s) as well. Since the legal issue which was adjudicated by the Ld. CIT(A) strikes at the root of the jurisdiction of the AO to have issued notice u/s.148 of the Act for the impugned AYs 2013-14 to 2016-17, with the consent of both the parties, we consider it fit to decide this legal issue first.

4. We first take up the Revenue’s appeal for AY 2013-14 in ITA No.1163/Chny/2025. It is seen that, before the Ld. CIT(A), the appellant had inter alia urged that, the notice issued u/s 148 of the Act for AY 2013-14 dated 30.03.2023 was beyond the time limit prescribed in proviso to Section 149 of the Act and therefore it contended that the impugned notice so issued and all consequent actions deserves to be declared as null & void. The Ld. CIT(A) is noted to have allowed this legal plea raised by the assessee by holding as under:-

“6.3.4 The undersigned has carefully examined the issue under consideration. The primary contention of the appellant is that the notice issued u/s 148 of the Act dated 30.03.2023 for the AY 2013-14 is barred by limitation on account of the provisions of clause (b) of sub-section (1) of Section 149 of the Act. The First Proviso to of the Act reads as under:-

“Provided that no notice under section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 1^st day of April, 2021, if [a notice under section 148 or section 153A or section