ITAT Declares Reassessment Notice Invalid for Income Below ₹50 Lakh

In a significant ruling, the Income Tax Appellate Tribunal (ITAT) has declared a reassessment notice as void ab initio (from the beginning) because it was issued beyond the stipulated three-year limit for cases involving income below ₹50 lakh.

Details of the Case

The case revolved around a reassessment notice issued on July 27, 2022. The ITAT scrutinized whether the notice complied with the provisions of Section 149(1)(a) of the Income Tax Act, which specifies the time limit for issuing reassessment notices.

Tribunal’s Observations

The tribunal noted that the notice was issued after the permissible time limit had expired. Furthermore, it was determined that the provisions of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA), did not apply in this particular instance.

The ITAT emphasized that adherence to statutory timelines is crucial in tax assessment proceedings. Issuing a notice beyond the prescribed period renders the entire reassessment process invalid.

Implications for Taxpayers

This ruling provides relief to taxpayers facing reassessment notices issued beyond the statutory time limit. It underscores the importance of the Income Tax Department adhering to the timelines prescribed under Section 149 of the Income Tax Act.