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Facts
The assessee challenged a final assessment order for AY 2015-16, arguing that the reassessment notice under Section 148 of the Income Tax Act was issued on 07.04.2022, which was beyond the statutory limitation period of 31.03.2022. The assessee contended that the notice and subsequent assessment were null and void due to being time-barred.
Held
The tribunal, relying on decisions of the jurisdictional High Court (MAKE MY TRIP INDIA PRIVATE LIMITED) and the Supreme Court (Union of India vs. Rajeev Bansal), held that the notice under Section 148 for AY 2015-16 was time-barred. It concluded that the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) was not applicable for this assessment year, rendering the impugned notice and subsequent assessment proceedings void ab initio. The final assessment order passed under Sections 144, 147, and 144C(13) was quashed.
Key Issues
Whether the reassessment notice issued under Section 148 of the Income Tax Act for AY 2015-16 was valid, given it was issued after the statutory limitation period and the inapplicability of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA).
Sections Cited
144, 147, 148, 148A, 149, 151, 143(3), 144C(13)
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Income Tax Appellate Tribunal, DELHI BENCH “D” NEW DELHI
Before: SHRI CHALLA NAGENDRA PRASAD & SHRI AVDHESH KUMAR MISHRA
आदेश /O R D E R
PER C.N. PRASAD, J.M.
This appeal is filed by the assessee against the final assessment order passed by the Assessing Officer u/s 144 read with 147 read with 144C(13) of the Act pursuant to the directions of the DRP dated 25.09.2024 in assessing the income of the assessee at Rs.5,92,920/-.
2. Ld. Counsel for the assessee, at the outset, submits that this is a case where the assessment was reopened by issue of notice u/s 148 of the Act. The outer limit for issue of notice u/s 148 of the Act for the AY 2015-16 was 31.03.2022, however, the notice u/s 148 of the Act was issued on 07.04.2022 beyond the limitation period and therefore the consequential assessment made pursuant to the notice is bad in law, null and void. Reliance was placed on the decision of the Jurisdictional High Court in the case of MAKE MY TRIP INDIA PRIVATE LIMITED vs. DCIT (2025) (4) TMI 46 DELHI HIGH COURT and NATIONALIST CONGRESS PARTY Vs. DCIT (EXEMPTION), (2025) (5) TMI 624 DELHI HIGH COURT a copy of which is placed at pages 2 to 8 of the compilation.
On the other hand, the Ld. DR fairly submitted that notice u/s 148 was dated 07.04.2022 when the limitation and the outer limit for issue of notice was 31.03.2022.
Heard rival submissions, perused the orders of the authorities below and the decisions relied on. Perusal of the notice suggests that the notice was issued on 07.04.2022 and the period of limitation for issue of notice u/s 148 for the AY 2015-16 expires on 31.03.2022. It is an undisputed fact that the notice was issued beyond 31.03.2022 which is the time limit specified u/s 149 of the 2 Act. We observe that in the case of MAKE MY TRIP INDIA PRIVATE LIMITED VS. DCIT (supra) the Hon’ble Delhi High Court had considered a similar situation and following the decision of the Hon’ble Supreme Court in the case of Union of India Vs. Rajiv Bansal the Hon’ble Delhi High Court held that notice issued beyond 31.03.2022 for the AY 2015-16 is liable to be set aside. The Hon’ble High Court while holding so observed as under: -
“HON'BLE MR. JUSTICE VIBHU BAKHRU AND HON'BLE MR. JUSTICE TEJAS KARIA For the Petitioner Through: Mr Salil Kapoor, Mr Sumit Lalchandani, Ms Ananya Kapoor, Mr Tarun Chanana, and Mr Shivam Yadav, Advocates. For the Respondents Through: Mr Abhishek Maratha, SSC, Mr Apoorv Agarwal, Mr Parth Samwal, JSCs, Ms Nupur Sharma, Mr Gaurav Singh, Ms Muskaan Goel, Mr Bhanukaran Singh Jodha, Advocates VIBHU BAKHRU. J. (ORAL) 1. The petitioner has filed the present petition, inter alia, praying as under: - “A. Issue a writ of and/or order and or directions in the nature of certiorari or any other appropriate writ, order or direction quashing the notice dated 19.05.2022 issued under Section 148A (b) of the Act; impugned notice dated 27.07.2022 issued under Section 148 of the Act and the impugned order dated 27.07.2022 passed under Section 148A (d) of the Act by the Respondent No. 1 and the proceedings initiated pursuant thereto; B. Issue a writ of and/or order and/or direction in the nature of Prohibition commanding Respondents to forebear from giving effect to and/or taking any step whatsoever pursuant to and/or in furtherance of the said purported notice under Section 148 of the Act and/or in 3 any proceedings initiated thereunder for the AY 2015-16, and grant stay on the reassessment proceedings.”
The petitioner impugns a notice dated 27.07.2022 [the impugned notice] issued under Section 148 of the Income Tax Act, 1961 [the Act] in respect of the Assessment Year [AY] 2015-2016 and contends that the same is barred by limitation. The petitioner had filed its return of income for AY 2015- 2016 on 28.11.2015. Thereafter, on 25.10.2017, the petitioner entered into an Advance Pricing Agreement [APA], Consequently, its return of income was required to be modified for the said year. The return as modified was selected for scrutiny. The said proceedings culminated in an assessment order dated 29.12.2018 passed under Section 143 (3) of the Act whereby the petitioner's income was assessed at Rs.1,90,02,11,840/-.
4. Aggrieved by the same, the petitioner filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. The said appeal was allowed by an order dated 24.06.2019 and the additions made by the Assessing Officer [AO] were set aside.
Thereafter on 21.04.2021, the AO issued a notice under Section 148 of the Act seeking to reopen the assessment for the AY 2015-16. The said notice was issued under the provisions relating to reassessment of income (Sections 147 to 151) of the Act as were in force on 31.03,2021 and prior thereto. The petitioner filed its return of income in response to the said notice and also sought reasons for re-opening of the assessment.
6. In the meanwhile, several petitions were filed assailing such notices that were issued under Section 148 of the Act after 31.03.2021 but following the statutory regime for reassessment as was in enforce prior to the said date. Some of these petitions were allowed on 15.12.2021 by a decision in Mon Mohan Kohli v. ACIT & Anr.: Neutral Citation No.: 2021:DHC:4181-DB and other connected matters. Similar decisions were rendered by some other High Courts.
These decisions were appealed by the Revenue before the Supreme Court. In Union of India & Others v. 4 Ashish Agarwal: (2023) 1 SCC 617, the Supreme Court, issued certain directions in exercise of powers its under Article 142 of the Constitution of India including the direction to treat such notices issued under Section 148 of the Act as notices under Section 148A (b) of the Act. The AO was also directed to furnish such material and information to the assessees as were required to accompany a notice under Section 148A (b) of the Act.
In a subsequent decision in Union of India and Others v. Rajeev BansaI: 2024 IN SC 754, the Supreme Court considered the manner of applicability of the- provisions of Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 [TOLA], During the said proceedings it was con ceded on behalf of the Revenue that TOLA was not applicable for reopening the assessments for AY 2015-16. The said concession was recorded in paragraph 19 (f) of the said decision. Paragraphs 19 (e) and 19 (f) of the said decision are relevant and are set out below: - “(e) The Finance Act 2021 substituted the old regime for re-assessment with a new regime. The first proviso to Section 149 does not expressly bar the application of TOLA. Section 3 of the TOLA applies to the entire income Tax Act, including Sections 149 and 151 of the new regime. Once the first proviso to Section 149 (1) (b) is read with TOLA, then all the notices issued between 1 April 2021 and 30 June 2021 pertaining to the assessment years 2013-2014. 2014-2015, 2015-2016. 2016-2017, and 2017-2018 will be within the period of limitation as explained in the tabulation below:
Assessment Within 3 Years Expiry Within six Expiry of Year (1) (2) Limitation years (4) Limitation read with read with TOLA for TOLA for (2) (3) (4) (5) 2013-2014 31.03.2017 TOLA not 31.03.2020 30.06.2021 applicable 2014-2015 31.03.2018 TOLA not 31.03.2021 30.06.2021 applicable 2015-2016 31.03.2019 TOLA not 31.03.2022 TOLA not applicable applicable 2016-2017 31.03.2020 30.06.2021 31.03.2023 TOLA not applicable 2017-2018 31.03.2021 30.06.2021 31.03.2024 TOLA not applicable 5 (f) The Revenue concedes that for the assessment year 2015-2016, all notices issued on or after 1 April 2021 will have to be dropped as they will not fall for completion during the period prescribed under the TOLA."
Following the aforesaid concession, this court in Ibibo Group Private Limited v Assistant Commissioner of Income Tax Circle 10-1, & Anr.: W.P.(C) 17639/2022 decided on 13.12.2024 allowed the petition challenging a similar notice for AY 2015-16 which was issued beyond the period of limitation as concededly TOLA was not applicable. Similar orders have also been passed by other courts as well.
In the Income Tax Officer Ward 1(2) Jaipur v R.K. Build Creations Pvt Ltd: Special Leave Petition (Civil) Diary No. 59625/2024 the Supreme Court dismissed the SLR arising from a similar decision rendered by the Hon’ble Rajasthan High Court in DB CWP No. 14414/2022. The said order is set out below: - “Delay condoned. Having regard to the concession made by the petitioner- Department in the case of Union of India vs. Rajeev Bansal, Civil Appeal no.8629 of 2024 on 03.10.2024 (2024 SCC ONLINE 754), this Special Leave Petition would not survive for further consideration. Hence, the Special Leave Petition is dismissed. Pending application(s), if any, shall stand disposed of."
In the present case the impugned notice was issued on 27.07.2022, which was admittedly beyond the period of limitation as prescribed under Section 149 (1) of the Act. Since TOLA was not applicable in respect of the said notices under Section 148 of the Act for AY 2015-16 as conceded by the Revenue in the case of Union of India v. Rajeev Bansal: 2024 INSC 754 (supra), the impugned notice is liable to be set aside 12. Accordingly, the impugned notice and proceedings emanating from the said notice are set aside.
The petition is allowed in the aforesaid terms.” 6
5. Similar view has been taken by the Hon’ble Delhi High Court in the case of NATIONALIST CONGRESS PARTY Vs. DCIT (supra).
Respectfully following the decisions of the Hon’ble Jurisdictional High Court, we hold that the notice dated 07.04.2022 issued u/s 148 of the Act for the AY 2015-16 is barred by limitation and consequently all the assessment proceedings pursuant to the said notice are void ab initio and bad in law. Thus, the final assessment order passed u/s 144 read with 147 r.w.s. 144C(13) of the Act by the Assessing Officer is hereby quashed. As we have quashed the assessment order on legal ground all other grounds raised by the assessee on merits are not adjudicated and since it would become only academic at this stage.
In the result, appeal of the assessee is allowed as indicated above.
Order pronounced in the open court on 23/05/2025