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Facts
The assessee filed an appeal against the order of the CIT(Appeals) which sustained additions made in the assessment order for AY 2015-16. The assessee's grounds of appeal primarily challenged the validity of the reassessment proceedings initiated under Section 147/148 of the Act.
Held
The Tribunal held that the notice issued under Section 148 of the Act on or after 01.04.2021 for reopening the assessment for AY 2015-16 is barred by limitation. Consequently, the reassessment made based on such notices is bad in law and void ab initio.
Key Issues
Whether the reassessment proceedings initiated under Section 147/148 for AY 2015-16, based on a notice issued after 01.04.2021, are barred by limitation and consequently bad in law?
Sections Cited
147, 148, 148A, 149(1), 151, 250, 68
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Income Tax Appellate Tribunal, DELHI BENCH “A” NEW DELHI
Before: SHRI CHALLA NAGENDRA PRASAD & SHRI M BALAGANESH
सुनवाईक�तारीख/ Date of hearing: 03.06.2025 23.07.2025 उ�ोषणाक�तारीख/Pronouncement on आदेश /O R D E R PER C.N. PRASAD, J.M.
This appeal is filed by the Assessee against the order of the Ld. CIT(Appeals)-29, New Delhi dated 31.05.2023 for the AY 2015-16 in sustaining the addition made in the assessment order. The assessee in its appeal raised the following grounds: -
A. “That Ld. CIT(A) vide impugned order passed u/s 250 of the Act (1961 Act) erred in not quashing the impugned assessment order passed u/s 147/148 being jurisdictionally flawed on multiple counts; B. That Ld. CIT(A) vide impugned order passed u/s 250 of the act erred in not quashing the impugned assessment order passed u/s 147/148 beingbased on invalid jurisdictional notice (new law) u/s 148 dated 30.07.2022 and invalid order u/s 148A(d) and invalid notice (old law) u/s 148 dated13.4.2021;
C. That Ld. CIT(A) vide impugned order passed u/s 250 of the Act erred in not quashing the impugned assessment order passed u/s 147/148 being based on invalid jurisdictional notice (new law) u/s 148 dated 30.07.2022 issued in violation of mandate (jurisdictional conditions) of sec. 149(1)(b) of 1961 Act;
D. That Ld. CIT(A) vide impugned order passed u/s 250 of the Act erred in not quashing the impugned assessment order passed u/s 147/148 being based on invalid jurisdictional notice (new law) u/s 148 dated 30.07.2022 which is time barred u/s 149(1) of 1961 Act;
E. That Ld. CIT(A) vide impugned order passed u/s 250 of the Act erred in not quashing the impugned assessment order passed u/s 147/148 being based on invalid jurisdictional notice (new law) u/s 148 dated30.07.2022 issued without valid sanction u/s 151 (no sanction is supplied to assessee);
F. That Ld. CIT(A) vide impugned order passed u/s 250 of the Act erred in not quashing the impugned assessment order passed u/s 147/148 which is made on basis of invalid order u/s 148A(d) which inturn is without objectively disposing the assessee’s objections u/s 148A(c);
G. That Ld. CIT(A) vide impugned order passed u/s 250 of the Act erred in not quashing the impugned assessment order passed u/s 147/148 being based on invalid jurisdictional notice (new law) u/s 148 dated 30.07.2022 issued contrary to mandate of 1961 Act;
H. That Ld. CIT(A) vide impugned order passed u/s 250 of the Act erred in not quashing the impugned assessment order passed u/s 147/148 of the Act which is in total violation of principle of natural justice.
I. That Ld. CIT(A) vide impugned order passed u/s 250 of the Act erred in not deleting the impugned addition made u/s 68 being untenable in law made in arbitrary manner without application of mind;
J. That Ld. CIT(A) vide impugned order passed u/s 250 of the Act erred in not quashing the impugned assessment order passed u/s 147/148 of the Act which is in violation of mandatory/binding CBDT instructions;
K. That Ld. CIT(A) vide impugned order passed u/s 250 of the Act erred in not quashing the impugned assessment order passed u/s 147/148 of the Act which is totally arbitrary and without application of mind.
L. That Ld. CIT(A) vide impugned order passed u/s 250 of the Act erred in not quashing the impugned assessment order passed u/s 147/148 of the Act which is made in abdicated manner without any iota of independent inquiry/examination being done during asst. qua subject/impugned additions made/sustained in the impugned orders.”
2. The Ld. Counsel for the assessee, at the outset, submits that in the case of the assessee a notice u/s 148 was issued on 30.07.2022 under new law which is barred by limitation since the provisions of taxation and other laws (relaxation and amendment of certain provisions) (TOLA) are not applicable for the AY 2015-16 as held by the Hon’ble Jurisdictional High Court in the case of Make My Trip (India) Pvt. Ltd. in WP(c) 2558/2023 dated 24.03.2025.
Ld. Counsel further submits that recently the Hon’ble Supreme Court in the cases of Deepak Steels & Power Ltd. Vs. CBDT and Others in Civil Appeal No.5177/2025 dated 02.04.2025 noted that the Revenue made a concession before the Hon’ble Supreme Court while disposing off the appeal in the case of Union of India & Others Vs. Rajiv Bansal (2024) (SCC) Online SC 2693, that for the AY 2015-16 notices issued on or after 01.04.2021 will have to be dropped as they would not fall for completion during the period prescribed under the TOLA. Ld. Counsel also submitted that similar view has been taken by the Hon’ble Supreme Court in the case of ACIT Vs. Nehal Rashid Shah in SLP (Civil) Diary No. (S) 57209/2024 dated 4.4.2025.
Therefore, it is submitted that in the light of these decisions the reassessment framed for the AY 2015-16 based on the notice issued u/s 148 of the Act dated 30.07.2022, is time barred and bad in law.
4. Ld. DR supported the orders of the Assessing Officer.
5. Heard rival contentions, perused the orders of the authorities below. Admittedly in this case notice u/s 148 was issued on 30.07.2022 under new law based on which the reassessment for the AY 2015-16 was framed by the AO on 31.5.2023. The reassessment was challenged before the Ld. CIT(Appeals) and the Ld. CIT(Appeals) dismissed the appeal for non-prosecution by the assessee.
In the case of Make My Trip (India) Pvt. Ltd. Vs. DCIT (supra) the Jurisdictional High Court considered whether reassessment completed for the AY 2015-16 based on a notice issued u/s 148 and the viz a viz the applicability of the provisions of TOLA and based on the concession of the Revenue that for the AY 2015-16 all the notices issued on or after 1.4.2021 will have to be dropped as they will not fall for completion during the period prescribed under the TOLA, held that the notice issued under 148 was beyond the period of limitation and consequently the same is liable to be set aside.
Further the Hon’ble Supreme Court in the case of Deepak Steel & Power Ltd. Vs. CBDT & Others (supra) quashed the notices issued u/s 148 observing as under: -
“2. These appeals arise from 'the order passed by the High Court of Orissa at Cuttack in Writ Petition (C) Nos. 2446 of 2823, 2543 of 2023 dated 1.2.2023 and 2544 of 2023 dated 10.02.2023 respectively by which the High Court disposed of the original writ petitions in the following terms:- "1. The memo of appearance filed by Mr. S. S. Mohapatra, learned Senior Standing Counsel for Revenue Department on behalf of Opposite Parties is taken on record.
In view of the order passed by this Court on 1st December, 2022 in a batch of writ petitions of which W.P. (C) Mo.9191 of 2022 (Kailash Kedia v. Income Tax Officer) was a lead matter and the subsequent order dated 10th January, 2023 passed in W.P.(C) Mo.36314 of 2022 (Shiv Mettalicks Pvt. Ltd., Rourkela v. Principal Commissioner of Income Tax, Sambalpur), the Court declines to entertain the present writ petition, but leaves it open to the Petitioner to raise all grounds available to the Petitioner in accordance with law including the grounds urged in the present petition at the appropriate stage as explained by the Court in those orders.
3. The writ petition is disposed of in the above terms."
3. We heard Mr. Saswat Kumar Acharya, the learned counsel appearing for the appellants (assessee) and Mr. Chandrashekhar, the learned counsel appearing for the revenue.
The learned counsel appearing for the revenue with his usual fairness invited the attention of this Court to a three judge bench decision of this Court in Union of India and Ors. v. Rajeev Bansal, reported in 2024 SCC OnLine SC 2693, more particularly, paragraph 19(f) which reads thus:- "19. (f) The Revenue concedes that for the assessment year 2015- 2016, all notices issued on or after April 1, 2021 will have to be dropped as they will not fall for completion during the period prescribed under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020."
As the revenue made a concession in the aforesaid decision that is for the assessment year 2015-2016, all notices issued on or after 1st April, 2021 will have to be dropped as they would not fall for completion during the period prescribed under the taxation and other laws (Relaxation and Amendment of certain Provisions Act, 2020). Nothing further is required to be adjudicated in this matter as the notices so far as the present litigation is concerned is dated 25.6.2021.
6. In view of the aforesaid, in such circumstances referred to above the original writ petition nos.2446 of 2023, 2543 of 2023 and 2544 of 2023 respectively filed before the High Court of Orissa at cuttack stands allowed. 7. The impugned notice therein stands quashed and set aside.”
Above decisions squarely applies to the fact situation of the assessee and therefore respectfully following the above decisions, we hold that the notices issued u/s 148 on or after 1.4.2021 for reopening the assessment for the AY 2015-16 are barred by limitation and consequently the reassessment made based on such notices are bad in law and void ab initio. Thus, the impugned reassessment order having been made pursuant to notice issued u/s 148 dated 30.07.2022 the reassessment order is hereby held to be bad in law and the same is quashed. Ground Nos. B, C & D of grounds of appeal of the assessee are allowed.
9. As we have quashed the reassessment on one of the legal issues raised in ground nos. B, C & D, all other grounds are not adjudicated as they become only academic at this stage.
In the result, appeal of the assessee is partly allowed as indicated above.
Order pronounced in the open court on 23.07.2025