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ITAT Rules: Reopening of AY 2015-16 Assessment Post 01.04.2021 Is Barred by Limitation

Published: February 28, 2026 | Category: Real Estate
ITAT Rules: Reopening of AY 2015-16 Assessment Post 01.04.2021 Is Barred by Limitation

The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench, has delivered a significant ruling in the case of Elegance Reality, a real estate entity. The ITAT held that the notice issued by the Assessing Officer (AO) after 01.04.2021 for Assessment Year (AY) 2015-16 was barred by limitation under the amended section 149 of the Income Tax Act, 1961. Consequently, the reassessment order passed under Section 147 of the Act has been quashed.

Elegance Reality filed an appeal contending that the Commissioner of Income Tax (Appeals) (CIT(A)) had erred in law and on facts by confirming the AO's action of issuing a notice under section 148 dated 11.06.2021. The AO issued this notice within the extended time period as per the Taxation and Other Laws (Relaxation of certain provisions) Ordinance, 2020 (TOLA) for AY 2015-16.

In compliance with the directions issued by the Hon’ble Supreme Court in the case of Union of India and Ors. Vs. Ashish Agrawal (2022), a fresh notice was issued to the appellant on 29.07.2022 under section 148 of the Income Tax Act. Urvashi Shodhan, counsel for the appellant, argued that the Revenue could not have issued the notices under section 3(1) of TOLA considering the time period as prescribed under section 149 of the Income Tax Act on 01.04.2021.

The appellant’s counsel relied on the Supreme Court decision in the case of Union of India vs. Rajeev Bansal (2024), which held that the reopening of assessment for AY 2015-16 during the extended time period by TOLA between 01.04.2021 to 30.06.2021 was bad in law and barred by limitation. Alpesh Parmar, the respondent counsel, agreed with the appellant’s council and was unable to point out any distinguishing facts before the tribunal.

Sanjay Garg, Judicial Member, and Annapurna Gupta, Accountant Member, observed that the issue was covered in favor of the appellant by the decision of the ITAT in the case of Hindva Builders. As the notice issued under section 148 was barred by limitation, the reassessment proceedings were deemed invalid.

Accordingly, the Tribunal held that the reopening of assessment for AY 2015-16 was bad in law and quashed the reassessment order passed under section 147. This ruling provides clarity and legal precedence for similar cases involving the limitation period for reassessment under the Income Tax Act.

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Frequently Asked Questions

1. What is the main ruling of the ITAT in the case of Elegance Reality?
The ITAT ruled that the notice issued by the Assessing Officer (AO) after 01.04.2021 for Assessment Year 2015-16 is barred by limitation under the amended section 149 of the Income Tax Act, 1961. The reassessment order passed under Section 147 of the Act has been quashed.
2. Why did Elegance Reality file an appeal?
Elegance Reality filed an appeal contending that the Commissioner of Income Tax (Appeals) (CIT(A)) had erred in law and on facts by confirming the AO's action of issuing a notice under section 148 dated 11.06.2021.
3. What was the basis of the appellant's argument?
The appellant's counsel argued that the Revenue could not have issued the notices under section 3(1) of TOLA considering the time period as prescribed under section 149 of the Income Tax Act on 01.04.2021. They relied on the Supreme Court decision in the case of Union of India vs. Rajeev Bansal (2024).
4. What did the ITAT observe in its decision?
The ITAT observed that the issue was covered in favor of the appellant by the decision of the ITAT in the case of Hindva Builders. As the notice issued under section 148 was barred by limitation, the reassessment proceedings were deemed invalid.
5. What is the significance of this ruling?
This ruling provides clarity and legal precedence for similar cases involving the limitation period for reassessment under the Income Tax Act. It ensures that reassessment notices issued after the prescribed limitation period are not valid.