The Calcutta High Court has a reassessment notice issued under Section 148 of the Income Tax Act, 1961 in MCX trading case, was time-barred, rendering the assessment proceedings void.
The bench of Chief Justice T.S. Sivagnanam and Justice Chaitali Chatterjee (Das) rejected the Revenue’s challenge to the ITAT’s order of May 1, 2024, which had quashed the assessment for the Assessment Year 2014–15. The original assessment had disallowed a commodity loss of ₹39,24,838 and added ₹39,78,000 under Section 68 for alleged bogus profits from stock derivative transactions.
The crux of the dispute was whether the reassessment notice, dated March 31, 2021, but emailed to the assessee on April 1, 2021, was within the limitation period. Relying on prior rulings, including Marudhar Vintrade Pvt. Ltd. vs. Union of India and Bagaria Properties & Investment Pvt. Ltd., the ITAT had ruled the notice invalid as it was communicated after the statutory deadline.
The High Court cited the Supreme Court’s landmark decision in Union of India vs. Ashish Agarwal (2022), which modified earlier High Court rulings but also mandated strict compliance with timelines for issuing and serving notices. The bench observed that the Revenue had failed to comply with these directions, and the delayed email dispatch—attributable to the department’s own IT system settings—meant the notice could not be treated as issued on March 31, 2021.
The department argued that the notice was valid, citing a Delhi High Court decision in Suman Jeet Agarwal. However, the Calcutta High Court noted that the Delhi ruling in fact supported the assessee’s position, holding that notices sent after March 31, 2021, could not be backdated for limitation purposes.
Concluding that the reassessment proceedings were legally unsustainable, the bench dismissed the appeal and the accompanying stay application. The substantial questions of law raised by the Revenue were answered against them.
Case Details
Case Title: Principal Commissioner Of Income Tax-5, Kolkat Vs Mamta Choraria
Case No.: ITAT/276/2024 IA NO: GA/1/2024
Date: 5th August, 2025
Counsel For Appellant: Prithu Dudhoria
Counsel For Respondent: Bhaskar Sengupta
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Mariya is the Senior Editor at Juris Hour. She has 5+ years of experience on covering tax litigation stories from the Supreme Court, High Courts and various tribunals including CESTAT, ITAT, NCLAT, NCLT, etc. Mariya graduated from MLSU Law College, Udaipur (Raj.) with B.A.LL.B. and also holds an LL.M. She started as a freelance tax reporter in the leading online legal news companies like LiveLaw & Taxscan.
