CHANDRAVADAN DESAI,KOLKATA vs. D.C.I.T., CIRCLE - 32(1), KOLKATA

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ITA 1009/KOL/2026Status: DisposedITAT Kolkata13 July 2026AY 2017-20184 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the notice issued under Section 148 and the consequent assessment order were barred by limitation. This was based on the Supreme Court's decision in Union of India Vs. Rajeev Bansal, which stipulated that such notices must be issued within the surviving period of limitation.

What were the facts?

The assessee's appeal concerns AY 2017-18. The Assessing Officer (AO) issued a notice under Section 148 of the Income Tax Act, 1961, which was later treated as a show cause notice under Section 148A(b). The AO subsequently passed an order under Section 148A(d) and issued a fresh notice under Section 148.

What were the issues?

The key legal issue was whether the notice issued under Section 148 and the order passed under Section 148A(d) were time-barred according to the prevailing limitation periods and judicial pronouncements.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148,Section 149(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH: KOLKATA

Before: Shri Rajesh Kumar& Shri Pradip Kumar Choubey]

आयकर अपील�य अ�धकरण, कोलकाता पीठ “ए’’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH: KOLKATA �ी राजेश कुमार, लेखा सट�य एवं �ी �द�प कुमार चौबे, �या�यक सद�य के सम� [Before Shri Rajesh Kumar, Accountant Member& Shri Pradip Kumar Choubey, Judicial Member] I.T.A. Nos. 1009/Kol/2026 Assessment Years: 2017-18 Chandravadan Desai Vs. DCIT, Circle-32(1), Kolkata

(PAN: AFQPD 8487 F) ( अपीलाथ� ) Respondent / ��यथ� Appellant / Date of Hearing / सुनवाई 07.07.2026 क� �त�थ Date of Pronouncement/ 13.07.2026 आदेश उ�घोषणा क� �त�थ For the Appellant/ Shri Akkal Dudhwewala, FCA �नधा�रती क� ओर से For the Respondent/ Shri Manas Mondal, Sr. DR राज�व क� ओर से

ORDER / आदेश Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-NFAC, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 02.03.2026 for the AY 2017-18. 2. The ld. AR, at the time of hearing, pressed the legal issue raised in Ground No. 1 and contended that, the order passed u/s 148A(d) dated 27.07.2022 and the notice issued u/s 148 of the Act dated 28.07.2022 was barred by limitation as the same was

2 I.T.A. No.1009/Kol/2026 Assessment Year: 2017-18 Chandravadan Desai issued beyond the time available under the surviving period, in light of the decision of the Hon’ble Apex Court in the case of Union of India and Others Vs. Rajeev Bansal [2024] 469 ITR 46 (SC), dated 03.10.2024 and therefore urged to quash the impugned assessment order.

3.

The facts in brief are that the ld. AO issued notice u/s 148 of the Act on 30.06.2021, for the impugned assessment year which is A.Y. 2017- 18, under the erstwhile reassessment regime. The extended period of limitation available by virtue of taxation and other laws (deduction and amendment of certain provisions) Act, 2020 (TOLA) expired on 30.06.2021. Subsequent to the decision of the Hon'ble Apex Court in the case of Union of India & Ors. Vs. Ashish Agarwal (2022 SCC Online SC 543) vide order dated 04.05.2022, the said notice u/s 148 of the Act dated 30.06.2021, was treated as show cause notice u/s 148A(b) of the Act. In compliance, the ld. AO issued first show cause notice on 148A(b) of the Act on 26.05.2022, calling upon the assessee to respond on or before 10.06.2022. The assessee replied to the said notice on 09.06.2022. Thereafter, pursuant to the decision of the Hon’ble Apex Court in the case of Union of India and other Vs. Rajeev Bansal [2024] 469 ITR 46 (SC), dated 03.10.2024, the ld. AO must issue a fresh notice u/s 148 of the Act within surviving time period available as on 30.06.2021, after excluding time permitted to the assessee to file reply to the notice issued u/s 148A(b) of the Act. In the present case, the surviving period available with the ld. AO as on 30.06.2021, was only one day and the same by virtue of proviso to Section 149(1) of the Act, stand extended to seven days from the end of the period allowed to the assessee for furnishing its reply. The assessee was given time upto 10.06.2022, to submit its response and the response was filed on 09.06.2022. Therefore, even applying the statutory extension of 7 days, the outer limit for issuance of notice u/s 148 of the Act was expired on 17.06.2022 (i.e. 10.06.2022 + 7 days). However, the ld. AO passed the order u/s 148A(d) of the Act dated 27.07.2022, and issued notice u/s 148 of the Act on 28.07.2022, which is barred by limitation. The following chart makes the position clear:

3 I.T.A. No.1009/Kol/2026 Assessment Year: 2017-18 Chandravadan Desai Sl. No. Event Date of Event Surviving Days 1. Original Notice issued u/s 148 of the 30.06.2021 Act 2. Last date of issuance reopening as 30.06.2021 1 Per TOLA 3. Since the time period available is 7 less than 7 days, the same is extended as per 4th proviso of section 149(1) of the Act 4. Date of supply of information as per 26.05.2022 the decision of UOI Vs Ashish Agarwal along with the notice issued u/s 148A(b) of the Act 5. Due date of furnishing the response 10.06.2022 to the notice issued u/s 148A(b) of the Act 6. Date of response by the Assessee 09.06.2022 8 7. Last date for issuance of notice u/s 17.06.2022 148 of the Act within the surviving time period [09.06.2022 + 8 Days] 8. Order passed u/s 148A(d) of the Act 27.07.2022 along with the notice issued u/s 148 28.07.2022 of the Act

4.

Considering the facts of the assessee's case in the light of decision of the Hon’ble Apex Court in the case of Rajeev Bansal(supra), we are of the considered opinion that the notice is barred by limitation. The case of the assessee find support from the following decisions:-

- Communist Party of India (Marxist) Vs. Income-tax Department reported in (2025) 174 taxmann.com 925 (Delhi) - Dhanraj Govindram Kella Vs. ITO, reported in (2025) 177 taxmann.com 194 (Gujarat) - Ashit kumar Satischandra Patel Vs. ITO reported in (2025) 179 taxmann.com 188 (Gujarat)

4 I.T.A. No.1009/Kol/2026 Assessment Year: 2017-18 Chandravadan Desai

5.

We therefore, respectfully following the decisions, quash the notice issued u/s 148 of the Act as barred by limitation and also the consequent assessment framed by the ld. AO dated 24.05.2023. Ground No. 1 is therefore allowed.

6.

Since, we have allowed the appeal on legal issue, other grounds raised on merit are not being adjudicated at this stage and are left open to be decided if need arises for the same in future.

7.

In the result, the appeal of the assessee is allowed.

Order is pronounced in the open court on 13th July, 2026

SdSd/- Sd/-

(Pradip Kumar Choubey /�द�प कुमार चौबे) (Rajesh Kumar/राजेश कुमार) Judicial Member/�या�यक सद�य Accountant Member/लेखा सद�य Dated: 13th July, 2026 SM, Sr. PS Copy of the order forwarded to: 1. Appellant- Chandravadan Desai, 37, SB Tower, Shakespeare Sarani, Minto Park, Kolkata-700017 2. Respondent – DCIT, Circle-32(2), Kolkata 3. Ld. CIT(A)- NFAC, Delhi 4. Ld. Pr. CIT- , Kolkata 5. DR, Kolkata Benches, Kolkata

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