ACIT 8 3 1, MUMBAI vs. VOLITION TRADING P LTD, MUMBAI

The grounds of appeal are as under: i. Whether, on the facts and in law, the Ld. CIT(A) was justified in holding that reassessment proceedings u/s 147 are barred by limitation under section 149, ignoring the applicability of extended limitation pursuant to the judgment of the Hon'ble Supreme Court in Union of India vs. Ashish Agarwal? ii. Whether the Ld. CIT(A) erred in relying on the judgment of the Hon'ble Supreme Court in Union of India vs. Rajeev Bansal to hold that notice u/s 148A(b) dated 28.05.2022 is time-barred, without appreciating the factual distinction and transitional provisions applicable to reassessment cases? iii.Whether the Ld. CIT(A) was correct in holding that once notice u/s 148A(b) is time-barred, the entire reassessment proceedings including order u/s 148A(d) and assessment u/s 147 r.w.s. 144B become void ab initio? iv.Whether the Ld. CIT(A) failed to appreciate that the reassessment proceedings were initiated on the basis of credible information received from Investigation Wing (STR), and therefore reopening was valid in law? v. Whether the Ld. CIT(A) erred in quashing the reassessment without adjudicating the merits of additions made by the Assessing Officer, particularly when substantial tax effect is involved? vi. Whether the Ld. CIT(A) was justified in ignoring that the original notice u/s 148 dated 29.06.2021 was issued within time and later proceedings u/s 148A were only in compliance with the directions of the Hon'ble Supreme Court? vii. Whether the interpretation adopted by the Ld. CIT(A) defeats the legislative intent of reopening provisions, especially in cases involving alleged bogus transactions based on investigation inputs? viii. Whether the Ld. CIT(A) erred in not appreciating that limitation provisions under section 149 should be read harmoniously with the relaxation granted by the Hon'ble Supreme Court during the COVID period? ix. Whether the Ld. CIT(A)'s order is legally sustainable when it results in annulment of assessment without examining factual findings recorded by the Assessing Officer?

Brief facts of the case are that the assessee company is dealing in aluminium and steel products and solar systems on wholesale basis for the period under consideration. During the course of investigation

The ld.AR at outset contended that the Income-tax Department had already conceded in subsequent decision in Union of India Vs. Rajeev Bansal (2024) 469 ITR 46 (SC) that the notices issued on or after 01.04.2021 for AY 2015-16 shall have to be dropped as they will not fall for completion during the period prescribed under "TOLA". The relevant para 19(f) of Rajeev Bansal as reproduced below was referred for an immediate reference:

1 The ld. AR submitted that following the above decision of the hon'ble Supreme Court in Rajeev Bansal, the notice u/s 148 of the Act is barred by time limitation and is invalid. The consequential assessment order was also invalid ab initio and both are liable to be quashed.

We have carefully considered the relevant facts and find that the issue is squarely covered in favour of the assessee by the Apex Court decision(supra) which has been consistently followed by various courts of law including the coordinate benches of ITAT in favour of respective assessees. The Hon'ble Apex Court followed the decision of Rajeev Bansal(supra) in case of Deepak Steel and Power Ltd v. Central Board of Direct Taxes [2025] 174 taxmann.com 144/305 Taxman 169 and after recording the concession of the learned advocate for the department and in view of the concession given before the Apex Court by learned advocate appearing for the Revenue as recorded in para 19(f) of the judgment in case of Rajeev Bansal (supra), has quashed and set aside the notice issued after 31.03.2021 under TOLA for A.Y. 2015-16. Similar orders are also passed by the Apex Court in the Asstt. CIT v. Nehal Ashit Shah [Special Leave Petition (Civil) Diary No. 57209 OF 2024, dated 4-4-2025];ITO v. R.K.Build Creations (P.) Limited [SLP (Civil) Diary No. 59625 OF 2024, DATED 17-1-2025].The hon’ble Delhi High Court has also passed the similar order in Bhagwan Sahai Sharma v. Dy. CIT [2025] 174 taxmann.com 14 (Delhi)Lalit Gulati v. Asstt. CIT [2025] 174 taxmann.com 273/305 Taxman 11 (Delhi).The hon’ble Punjab and Haryana High Court has taken similar decision in P a g e | 5 A.Y. 2015-16 case of Jay Agro Industries v. ITO [CWP No. 7405 of 2025, dated 19-3-2025] etc. The ld.DR did not controvert the contentions of the assessee and the settled legal position in this regard.

1 Thus, we find that the issue is no longer res integra. The Hon'ble Supreme Court in Rajeev Bansal (supra) has recorded the Revenue's concession in para 19(f) that all notices issued on or after 01.04.2021 for AY 2015-16 are liable to be dropped. In view of above, the impugned notice issued under section 148 of the Act for relevant assessment year is held to be invalid as same was issued during the extended period from 01.04.2021 to 30.06.2021 under TOLA. The impugned assessment proceeding is barred by limitation and without jurisdiction. Hence, the impugned assessment order passed by the AO in present case is, hereby, held to be bad in law and quashed. Grounds of appeal in this regard are allowed.

As we have quashed the order of assessment itself, there is no necessity of adjudicating other grounds of appeal on merits and the same are kept open undecided.

In the result, the appeal of the Revenue stands Dismissed.