The issuance of notice under section 148 was ruled invalid as it was beyond the limitation period specified under the previous regime, making the reassessment void ab initio under Income Tax Act.

ORDER

PER KESHAV DUBEY, JUDICIAL MEMBER:

This appeal at the instance of the assessee is directed against the order of the ld. Income Tax Officer, Ward Intl. Taxation 1(2), Bangalore dated 17.12.2024 vide DIN & Order No. ITBA/AST/S/147/2024-25/1071274366(1) for the assessment year 2015-16.

2. The assessee has raised the following grounds of appeal:

3. Brief facts of the case are that the assessee is a non- Resident and did not file his return of income in India for the AY 2015-16 as his income in India was way below the taxable limit chargeable to tax in India. The case of the assessee was re-opened u/s. 147 of the Act after following due procedure as envisaged u/s. 148A of the Act. Accordingly, a notice u/s. 148 of the Act was issued to the assessee on 19/04/2022. In response to the notice u/s. 148 of the Act, the assessee filed his return of income on 18/05/2022 declaring total income of Rs.1,91,920/-. Accordingly, the notices u/s. 143(2) and 142(1) of the Act were issued along with the Show Cause notice dated 05/12/2023 to the assessee. As observed by the AO, the assessee made only part compliances.

3.1 In the instant case, specific information was disseminated through the insight portal in accordance with the risk management strategy (RMS) formulated by the CBDT. As per the information available, the assessee had undertaken the below mentioned transactions-

The AO after considering the reply of the assessee, concluded the assessment proceedings by holding that the assessee has failed to establish the sources of fund for making cash deposits to the extent of Rs.10,12,160/- and hence the amount of Rs.10,12,160/- remains unexplained which needs to be brought to tax u/s. 68 of the Act. Hence, amount of Rs.10,12,160/- was added back to the total income of the assessee as unexplained cash credit u/s. 68 of the Act as per the direction passed by the ld. DRP. The AO completed the assessment proceedings on a total assessed income of Rs.12,04,080/- as against total income declared as per return amounting to Rs. 1,91,920/-.

4. Aggrieved by the assessment completed u/s. 147 r.w.s 144C(13) of the Act vide order dated 17/12/2024, the assessee has filed the present appeal before this Tribunal. The assessee has also filed a paper book comprising 209 pages containing therein the copies of notices/ order/ ITR/ synopsis of objections filed/ copy of additional evidence/ copy of remand report as well as rejoinder to remand report along with the case laws relied upon by the assessee.

5. Before us, the ld. AR of the assessee at the outset by raising the legal ground vehemently argued that the notice issued u/s. 148 of the Act dated 19/04/2022 are barred by limitation. The ld. AR of the assessee submitted that as per the provisions of section 149 of the Act as introduced by Finance Act 2021, which prescribed the time limit for issuance of notice u/s. 148 of the Act states that no notice u/s. 148 of the Act shall be issued to the assessee at any time in a case for the relevant AY beginning on or before first day of April, 2021, if such notice could not have been issued at that time on account of the beyond the time limit specified under the provisions of clause (b) of sub-section(1) of section 149 as they stood immediately before the commencement Finance Act, 2021. Further, the ld. AR of the assessee submitted that in the present case, the last date for issuance of notice u/s. 148 of the Act under the erstwhile section 149(1)(b) for AY 2015-16 is only up to 31^st March 2022. Further, even if we consider the permissible exclusion/ extension under 3rd and 4th proviso as stood then, the notice the u/s. 148 could have been issued on or before 18/04/2022. However, in the present case the notice was issued o