ITAT Mumbai Strikes Down Section 148 Reassessment Notice for AY 2015-16 Due to Expiry of Limitation Period

Background of the Case

The Income Tax Appellate Tribunal (ITAT) Mumbai G Bench delivered a significant ruling in the matter of Swami Vivekanand College Vs ITO concerning Assessment Year 2015-16. The core controversy revolved around whether reassessment proceedings initiated through a notice under Section 148 of the Income Tax Act, 1961 could be sustained when issued beyond the statutory limitation period prescribed under the erstwhile reassessment framework.

The appellant, Swami Vivekanand College, challenged the reassessment proceedings on jurisdictional grounds, contending that the Assessing Officer exceeded his statutory authority by initiating proceedings after the expiry of the permissible time limit. The Tribunal was called upon to examine whether the notice dated 13.04.2022 fell within the permissible timeframe or stood vitiated due to limitation constraints.

Factual Matrix

According to the revenue authorities, the assessee institution had failed to submit any return of income under Section 139(1) of the Income Tax Act, 1961 for the year under consideration. The Assessing Officer, while examining data available through the INSIGHT portal maintained by the department, discovered that the educational institution had conducted substantial cash deposit transactions during the financial year relevant to Assessment Year 2015-16.

Based on this information extracted from the digital database, the Assessing Officer proceeded to reopen the assessment by invoking provisions of Section 147 of the Income Tax Act, 1961. A notice under Section 148 was consequently issued on 13.04.2022, initiating the reassessment machinery.

Following the issuance of the reopening notice, the Assessing Officer completed the reassessment proceedings through an order dated 08.03.2024. The total income of the institution was computed at Rs. 1,09,65,970/- through this reassessment order.

Aggrieved by this assessment determination, the educational institution preferred an appeal before the first appellate authority, namely the National Faceless Appeal Centre (NFAC), Delhi. However, the Commissioner of Income Tax (Appeals) dismissed the appeal vide order dated 09.09.2025, upholding the reassessment proceedings.

Proceedings Before ITAT

Dissatisfied with the appellate order, the assessee approached the Income Tax Appellate Tribunal, Mumbai. In Ground No. 1 of the appeal memorandum, the institution challenged the legality and validity of the notice issued under Section 148 of the Act, arguing that it was barred by the statute of limitations.

Additionally, the appellant filed an additional ground on 12.12.2025 raising identical jurisdictional issues. The Tribunal, recognizing that the matter involved a pure question of law affecting jurisdiction that went to the very foundation of the proceedings, decided to admit the additional ground for adjudication. The Tribunal observed that since the issue could be resolved based on facts already on record without requiring fresh evidence, it deserved to be addressed at the threshold itself.

Arguments Advanced by the Assessee

The learned Counsel representing the educational institution presented comprehensive arguments challenging the temporal validity of the reopening notice. The core submission was that under the pre-amendment reassessment regime applicable to Assessment Year 2015-16, the Assessing Officer's power to reopen assessments under Section 147 of the Income Tax Act, 1961 was subject to strict time limitations.

Specifically, it was argued that for Assessment Year 2015-16, the statutory period of six years from the end of the relevant assessment year concluded on 31.03.2022. Consequently, any notice under Section 148 issued after this date would fall outside the permissible limitation period and would be jurisdictionally invalid.

The appellant's counsel further contended that the provisions of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (commonly referred to as TOLA) could not be invoked to extend the limitation period beyond 31.03.2022 for Assessment Year 2015-16.