Where proceedings u/s 153C barred by limitation, AO can’t invoke section 148 & 148A

Where proceedings u/s 153C are barred by limitation, AO can not reopen the case invoking section 148 and 148A of the Act – ITAT

In a recent judgment, ITAT Agra has held that where proceedings u/s 153C were barred by limitation, AO can not take recourse was reopen the case invoking section 148 and 148A of the Act.

ABCAUS Case Law Citation:
5126 (2026) (04) abacus.in ITAT

In the instant case, the assessee had challenged the order passed by the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre confirming the action of the Assessing Officer (AO) in initiating proceedings u/s 147, 148A(b), 148A(d) and issuing notice u/s 148. of the Income Tax Act, 1961 (the Act) in place of proceeding u/s 153C of the Act.

Pursuant to a search, the AO of the searched party had issued a letter to the AO of the appellant assessee sharing the information found at search related to the appellant.

The Tribunal observed that the period of limitation for completion of the assessment u/s 153C in appellant’s case was 21 months from the end of the financial year in which the authorization for search u/s 132 was executed or 9 months from the end of the financial year in which books of account or documents are handed over to AO of the other person whichever is later. However, the assessment was completed by the AO by invoking the provisions of section 148A and 148 of the Act. 

The Tribunal noted the Rajasthan High Court had held that when search was carried out and respondent had the authority to reopen the assessment by invoking the provisions of section 153C of the Act and reassessment proceedings u/s 153A of the Act. However, it was not done within the period of limitation prescribed u/s 153B of the Act.  The AO was fully aware of the fact that proceedings u/s 153C would be barred by limitation; therefore, recourse was taken to the provisions contained in section 148 and 148A of the Act which had nonapplication in such case.

Following the above decision, the Tribunal set aside the assessment order passed u/s 148 of the Act. 

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