SCARLET TRADELINK PRIVATE LIMITED,AHMEDABAD vs. THE ITO, WARD-4(1)(1), AHMEDABAD

The present appeal preferred by the Assessee is directed against the Order, dated 27/02/2025, passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the ‘CIT(A)’] whereby Learned CIT(A) had dismissed the appeal against the Assessment Order, dated 26/05/2023 passed under section 147 r.w.s. 143(3) of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’],for the Assessment Year 2016-2017. 3. The Assessee has Grounds of Appeal raised by the Assessee reads as under:

We have heard both the sides and have perused the materials available on record.

When the appeal was taken up for hearing, the Learned Authorized Representative for the Assessee challenged the validity of the re- assessment proceedings contending that the order passed by the Assessing Officer u/s. 147 r.w.s. 144B of the Act on 26/05/2023 for the Assessment Year 2016-2017 was barred by limitation. Reliance in this regard was placed upon the judgment of Hon’ble Supreme Court in the case of Union of India v. Ashish Agarwal [2022] 444 ITR 1, and Union of India v. Rajeev Bansal [2024] 469 ITR 46. It was further submitted that the additional ground now being raised by the Assessee, by way of Letter filed on 02/09/2025, could be adjudicated on the basis of material forming part of record and therefore, the Tribunal was empowered to admit and adjudicate the same.

In order to show that the notice under Section 148 of the Act was issued after the lapse of the ‘surviving period’, the Learned Authorised Representative for the Assessee placed on record following list of dates and computation of ‘surviving period’. Particular Date/Period Paper Book Page No. Notice under Section 148 of the Act [Pre-judgment dated 05.05.2021 21 04.05.2022 rendered in the case of Union of India v. Ashish Agarwal] Surviving period/days before expiry of limitation on 30.06.2021 56 days [Number of days computed by following formula: 30.06.2021 less date on which initial notice under section 148 was issued]

Per contra, the Learned Departmental Representative vehemently contended that the Assessment Order passed under Section 147 r.w.s. 144B of the Act was within limitation. It was submitted that the Assessee was also issued notice, dated 21/07/2022, granting the Assessee further time. However, the same has not been factored in by the Learned Authorized Representative for the Assessee in the above list of dates and the computation of ‘surviving period’ [prepared as per the judgment of the Hon’ble Supreme Court in the case of Rajeev Bansla (supra)] furnished during the course of hearing.

In the rejoinder the Learned Authorized Representative for the Assessee submitted that the Assessee had never sought any further extension/opportunity/time to furnish any reply/documents and therefore, for the purpose of computing period available to the Assessing Officer to conclude assessment, date of reply should be taken as 15/06/2022. Reliance in this regard was placed upon (a)

We have considered the rival submissions and have perused the material on record. We are of the view that the additional ground raised by the Assessee can be adjudicated after taking into consideration material on record without inquiring into new facts. Therefore, the additional grounds raised by the Assessee are admitted in view of the judgment of the Hon’ble Supreme Court in the case of National Thermal Power Co. Ltd. Vs. CIT: 229 ITR 383. Accordingly, we proceed to adjudicate the contention raised by the Assessee by way of the additional ground.

It emerges from record that notice under Section 148 of the Act was issued for the Assessment Year 2015-2016 on 05/05/2021. In compliance with the judgment of the Hon'ble Supreme Courtin case of Union of India and others vs Shri Ashish Agarwal (supra), the aforesaid notice, dated 05/05/2021, issued under Section 148 of the Act (under old regime) was treated as notice issued under Section 148A(b) of the Act (under new regime effective from 01/04/2021). The Assessee filed objections vide Letter, dated 15/06/2022. The Assessing Officer disposed off the objections and issued notice under Section 148 of the Act (new regime) on 27/08/2022. Thereafter, the Assessing Officer passed Assessment Order, dated 26/05/2023, under Section 147 r.w.s. 143(3) of the Act. Before us, the Assessee raised additional ground contending that the ‘surviving period’ of 56 days computed as per the judgment of the Hon’ble Supreme Court in the case of Rajeev Bansal (supra) started running from 15/06/2022 and lapsed on 10/08/2022. Therefore, the Notice under Section 148 of the Act issued on 27/08/2022 is barred by limitation. Conversely, the stand taken by the Learned Departmental was that the Assessee was granted further opportunity vide Notice, dated 21/07/2022, and in response to the same Assessee filed reply on 26/07/2022. The notice under Section 148 of the Act has been issued within 56 days from 26/07/2022 and therefore, the same is not barred by limitation. We note that in the present case, the Assessee filed his reply/response on 15/06/2022. In the said reply letter the Assessee placed his submission along with supporting documents before the Assessing Officer and requested the Assessing Officer to drop the reassessment proceedings. Thereafter, the Assessing Officer issued notice, dated 21/07/2022, giving the Assessee further time even though the Assessee had not sought for further time. In Reply Letter, dated 26/07/2022, the Assessee stated as under:

Give the above factual position, we accept the contention of the Assessee that in the facts and circumstances of the present case, 15/06/2022 would have to be taken as the date of reply filed by the Assessee and the limitation for the Assessing Officer to issue notice under Section 148 of the Act within the ‘surviving period’ would start running form the said date. Computed thus, the ‘surviving period’ of 56 days lapsed on 10/08/2022. Since the notice under Section 148 of the Act was issued on 27/08/2022, the same is barred by limitation as per the judgment of the Hon’ble Supreme Court in the case of Rajeev Bansal (supra). Therefore, the notice issued under Section 148 of the Act and the consequent Assessment Order, dated 26/05/2023, passed under Section 147 read with Section 143(3) of the Act for the Assessment Year 2016-2017 are quashed. Additional Ground raised by the Assessee is allowed and all the other grounds raised by the Assessee in the present appeal are dismissed as having been rendered infructuous.

In the result, in terms of paragraph 11 above, the present appeal preferred by the Assessee is allowed.

""यथ"/ The Respondent. 3. संबंिधतआयकरआयु"/ Concerned CIT 4. आयकरआयु"(अपील) / The CIT(A) 5. िवभागीय"ितिनिध, आयकरअपीलीयअिधकरण/ DR, ITAT, 6. गाड"फाईल /Guard file. आदेशानुसार/BY ORDER,