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Facts
The assessee preferred an appeal challenging the order of reassessment passed by the Assessing Officer for AY 2015-16. The AO had issued a notice under Section 147 read with Section 144 of the Income Tax Act. The assessee's original return declared income of Rs. 25,29,444, but information was received about claimed bogus Long Term Capital Gains (LTCG) of Rs. 50,49,975.
Held
The Tribunal held that the notice issued by the Assessing Officer under Section 148 of the Income Tax Act for the Assessment Year 2015-16, dated 23-07-2022, was time-barred. This decision was based on following the ruling of the Hon'ble Supreme Court regarding the limitations period.
Key Issues
Whether the notice issued under Section 148 of the Income Tax Act for reassessment for AY 2015-16, dated 23-07-2022, was time-barred, considering the provisions of Section 149 and the applicability of TOLA relaxations.
Sections Cited
147, 144, 148, 149, 151, 151A, 69, 142(1)
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Income Tax Appellate Tribunal, DELHI BENCH “E” NEWDELHI
Date of hearing 03.07.2025 Date of 18.07.2025 pronouncement ORDER
PER SUDHIR KUMAR JM:
The assessee preferred the appeal, challenging the order dated passed by National Faceless Appeal Centre Delhi (in short NFAC)passed by theAssessing Officer order dated 19.05.2023 for A.Y. 2015-16 under the section 147 r.w.s.144 of the Income Tax Act, 1961(In short “the Act”).
Pritam Kumar v. DCIT A.Y. 2015-16 2 2. The assessee has raised following grounds of appeal:
1. On the facts and circumstances of the case, the order passed by the Ld. Commissioner of Income Tax (Appeals) [CIT(A)] is bad both in the eye of law and on facts.
2. On the facts and circumstances of the case, the Ld. CIT(A) has erred both on facts and in law in passing the order without giving assessee an opportunity of being heard in violation of the principle of natural justice.
3. On the facts and circumstances of the case, the CIT(A) has erred in confirming the re-assessment proceeding initiated by the AO by issuing notice u/s 148 which is barred by limitation as per the provisions of section 149 of the Act.
4. On the facts and circumstances of the case, the CIT(A) has erred in confirming the assessment proceedings initiated by issuing notice u/s 148 of the Act which is liable to be quashed in the absence of Document Identification Number (DIN) on the notice u/s 148 of the Act.
5. On the facts and circumstances of the case, the Ld. CIT(A) has erred both on facts and in law in going ahead with the assessment despite the fact that the proceedings initiated u/s 148 were in contravention to the provision of section 151A of the Act.
6. On the facts and circumstances of the case, the Ld. CIT(A) has erred both on facts and in law in confirming the initiation of proceedings under Section 147 which is bad in law having been made without proper sanction as prescribed in Section 151 of the Act.
7. (i) On the facts and circumstances of the case, the Ld. CIT(A) has erred both on facts and in law in reopening the assessment proceedings u/s 147 of the Act without having valid information. (ii) That the reassessment proceedings have been initiated on the 7 basis of information without there being any independent application of mind. (iii) That the reassessment order passed by NFAC is bad and liable to be quashed as the same has been reopened on the basis of the information which are vague and against the facts on record.
Pritam Kumar v. DCIT A.Y. 2015-16 3 8. On the facts and circumstances of the case, the CIT(A) has erred both on facts and in law in confirming the reassessment of income at Rs. 23,75,230/- as against the returned income of Rs. 74,25,205/-. 9. 9(i) On the facts and circumstances of the case, the CIT(A) has erred both on facts and in law in confirming the addition of Rs.50,49,975/- u/s. 69 of the Act by treating the alleged bogus LTCG concealed income of the appellant. (ii) That the addition has been confirmed despite the transaction having been done through proper banking channel and as per the Rules and Regulations of the Stock Exchange.
That the appellant craves leave to add, amend or alter any of the grounds of appeal.
3. The brief facts of the case are that the assessee has filed the return of income by declaring income of Rs. 25,29,444/- on 28-08-2015. Subsequently information received that the assessee claimed Bogus LTCG through reputed stocks by issuing ante dated forged notes to the tune of Rs. 50,49,975/-. Notice u/s 142(1) was issued to the assessee but assessee did not comply the notice. The AO completed the assessment by making the addition of Rs 50,49,975/- and assessed the total income of Rs. 74,25,205/- of the assessee.
4. Aggrieved the order of the AO the assessee preferred the appeal before the NFAC who vide order dated 19-12-2024 dismissed the appeal. Being aggrieved the order of the Ld. NFAC the assessee is in appeal before the Tribunal.
Ld. AR for the assessee has raised the legal issue and stated that the notice dated 23-07-2022 issued by AO u/s 148 of the Act is time barred. In this regard he has submitted as under :
Pritam Kumar v. DCIT A.Y. 2015-16 4 original notice u/s 148 of the Act was issued on 30-06-2021 Letter issued by AO supplying information with reference to section 148A(b) in consequence to Hon’ble Supreme Court Order in Ashish Agarwal dated 04-05-2022 26-05-2022 Replied filed before AO 10-06-2022 Order u/s 148 A(d) 23-07-2022 Notice u/s 148 of the Act 23-07-2022 6. In consequence to the directions issued by the Hon’ble Supreme court in the case of Union of India vs. Ashish Agarwal dated 04-05- 2022 the Assessing Officer issued the fresh notice u/s 148 of the Act on 23-07-2022. He further submitted that as per the section 149 of the Act the notice u/s 148 of the Act could be issued within a period of six years from the end of the relevant assessment year i.e 2015-2016. The limitation of issuing notice expired on 31-03-2022. In the present case the notice u/s 148 of the Act was issued on 23-07-2022 which is beyond time. Reliance has placed on the decisions of Union of India & Ors Vs. Rajeev Bansal 2024 (10) TMI 264 Supreme Court (LB) in this Case the Hon’ble Supreme Court held as under:
In Ashish Agarwal (supra), this Court was called upon to decide whether the Revenue was correct in assessees, was already in force. This Court resolved the issue by holding that all reassessment notices issued after 1 April 2021 should have been issued in accordance with the new regime. However, the Court construed the notices issued under Section 148 of the old regime by deeming them to be notices issued under Section 148A(b) of the new regime. In Ashish Agarwal (supra), this Court did not deal with the issue of whether or not the reassessment notices were issued within the time limits prescribed under the …..
In the above sited case, the revenue concedes that for the assessment year 2015-16, all notices issued on or after 1st April 2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA. Ld. AR also relied on the following decisions: i. Deepak Steel and Power Limited Vs. Central Board of Direct Taxes & Ors civil appeal No 5177 of 2025 dated 02-04-2025 ii. Assistant commissioner of Income Tax Circle 19(1) & Ors vs. Nehal Ashit Shah special Leave Petition (civil) Diary No 57209/2024 dated 04-04-2025 iii IBIBO Group Private Limited vs. Asst. CIT WP(C ) 17639/2022 dated 13-12-2024 Delhi High Court iv. Make My trip India Private Limited vs. DCIT, WP (C ) 2557/2023 dated 24-03-2025 Delhi High Court v. Kum Kum Kohli Vs. Asst. CIT W.P. (C) 930/2023 dated 30-05-2025 Delhi High Court Pritam Kumar v. DCIT A.Y. 2015-16 7 vi. Harish Kumar vs. NFAC and I T A no. 4676/Del/2024 dated 18-06-2025 Delhi 8. The Ld. DR relied upon the orders of the lower authorities.
We have heard the revival contention of the parties and gone through the material available on record.In, the present case the notice was issued for the A.Y. 2015-2016 on 23-07-2022 beyond the period of limitation. Respectfully following the decision of the Hon’ble Supreme Court, we hold that the notice issued to the assessee dated 23-07-2022 u/s 148 of the Act for the A.Y.2015-16 is time barred. The legal issue raised by the assessee is allowed. 10 Since we have decided the legal ground in favour of the assessee, the other grounds have become academic and keep them open for adjudication.
In the result the appeal of the assessee is allowed. Order pronounced in the open court on 18/07/2025.