GALAX MINERALS (P) LTD (SINCE M/S S.G. DEVBUILD P LTD ),NEW DELHI vs. ITO WARD 23(1), DELHI

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ITA 994/DEL/2026Status: DisposedITAT Delhi29 April 2026AY 2016-179 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the notice for reassessment under Section 148 was issued after the expiry of the limitation period, as per the Supreme Court's decision in Rajeev Bansal. Therefore, the reassessment proceedings were quashed.

What were the facts?

The assessee appealed against the CIT(A)'s order upholding reassessment proceedings. The primary contention was that the notice for reassessment was issued without proper jurisdiction and was time-barred.

What were the issues?

Whether the reassessment proceedings were initiated within the prescribed time limit and with proper jurisdiction, particularly concerning the validity of the notice issued under Section 148.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 148A,Section 149,Section 151

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “F”, NEW DELHI

Before: SHRI S. RIFAUR RAHMAN & SHRI SUDHIR KUMAR

For Respondent: Ms. Monika Singh, CIT-DR
Hearing: 09.04.2026Pronounced: 29.04.2026

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “F”, NEW DELHI

BEFORE SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI SUDHIR KUMAR, JUDICIAL MEMBER

ITA NO. 994/Del/2026 And Stay Application No. 146/Del/2026 A.YR. : 2016-17 M/S GALAX MINERALS (P) VS. INCOME TAX OFFICER, LTD., WARD 23(1), SINCE M/S S.G. DEVBUILD (P) NEW DELHI LTD., AMALGAMATED WITH M/S GALAX MINERALS (P) LTD., AND PRESENTLY KNOWN AS M/ GALAX MINERALS (P) LTD. 296, FOREST LANE SAINIK FARM, NEW DELHI – 110 068 [PAN: AADCG7346K) (APPELLANT) (RESPONDENT)

Appellant by : Sh. Ankit Kumar, Adv. Respondent by : Ms. Monika Singh, CIT-DR Date of hearing : 09.04.2026 Date of pronouncement : 29.04.2026

ORDER PER SUDHIR KUMAR, JM :

The assessee has filed the appeal for Assessment Year 2016- 17 which is directed against the order dated 14/1/2026 of the Ld.

CIT(A)/NFAC, Delhi. Later, assessee also filed the stay application for the recovery of outstanding demand in the appeal. 1.1 In the appeal, the assessee has raised as many 6 grounds of appeal on jurisdictional as well as on merits, but Ld. AR has only argued the jurisdictional ground viz. ground no. 2 to 2.8, which read as under:- 2. That the CIT(A) has erred both in law and on facts in upholding the initiation of proceedings under section 147 of the Act and, completion of assessment under section 147/144B of the Act without appreciating that the same were without jurisdiction and hence, deserved to be quashed as such.

2.1 That the CIT(A) has failed to appreciate that the notice u/s. 148A(b) of the Act, under section 148 of the Act order u/s. 148A(d) of the Act were also illegal, invalid and without jurisdiction and deserves to be quashed as such. 2.2 That the Ld. CIT(A) has failed to appreciate that there was no tangible material on record in the form of specified information to suggest that income of the appellant had escaped assessment in view thereof the proceedings initiated were illegal, untenable and therefore unsustainable.

2.3 That the CIT(A) has failed to appreciate that non supply of information in accordance with clause (i) of Explanation 1 to Section 148 of the Act even otherwise vitiated the notice u/s. 148A(b) of the Act and order u/s. 148A(d) of the Act.

2.4 That the CIT(A) has failed to appreciate that initiation of proceeding was mechanical and without any application of mind much less independent application of mind, therefore the notices issued u/s. 148A (b) of the Act; and u/s. 148 of the Act were invalid notice; and also order u/s. 148A(d) of the Act was an invalid order and thus assumption u/s. 147 of the Act was without jurisdiction.

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2.5 That the Ld. CIT(A) has failed to appreciate that notice issued u/s. 148 of the Act after three years have elapsed from the end of the relevant assessment year in absence of possession of books of account or other documents or evidence which reveal that the income chargeable to tax represent in the form of ‘asset’, which has escaped assessment amounting to or to amount to fifty lakh rupees or more for that year in view of provisions of section 149(1)(b) of the Act.

2.6 That notice u/s. 148A(b) of the Act was issued based on factually incorrect assumptions and presumptions and therefore such a notice being highly cryptic vague could not legally and logically be made a basis for assumption of jurisdiction and therefore deserves to be quashed as such.

2.7 That the CIT(A) has failed to appreciate that order u/s. 148A(d) of the Act and, notice dated 29.7.2022 u/s. 148 of the Act have been issued without validly complying with section 151 of the Act; and thus ex-consequenti assumption of jurisdiction was illegal, invalid and, void ab initio were also without jurisdiction.

2.8 That the Ld. CIT(A) has failed to appreciate that notice u/s. 148A(b) of the Act and order u/s. 148A(d) of the Act were contrary to section 151A of the Act; and therefore, the assumption of jurisdiction was not in accordance with law.

2.

With regard to ground no. 2 to 2.8 as reproduced above are concerned, Ld. AR has submitted that these grounds are relating to assumption of jurisdiction under section 147 read with section 148 of the Act and completion of assessment u/s. 147 read with section 144B of the Act which in the respectfully submission of the assessee are not in conformity with law and therefore, deserve to be quashed as such. The Ld. AR further submitted that the (i) assumptions of jurisdiction was illegal, invalid and void ab initio due to the fact that the notice dated 29.7.2022 u/s. 148 of the Act issued without

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complying section 151 of the Act is not in accordance with law and (ii) the that the proceedings initiated u/s. 148 of the Act are barred by limitation. 3. Ld. CIT(DR) relied upon the orders of the authorities below.

4.

Considered the rival submissions and material placed on record. We observe that notice u/s 148 was issued on 07.06.2021. Subsequently, further notice was issued u/s 148A (b) on 24.5.2022 and order u/s 148A(d) was passed and notice u/s 148 was issued to the assessee on 29.7.2022. The relevant copy of the notices and order, as state above, are placed on record and before us, ld. AR submitted that for issue of notice u/s 148, the Assessing Officer should have obtained approval from Ld. Principal Chief Commissioner or Ld. Principal Director General or Chief Commissioner or Director General, where there is no ld. Principal Chief Commissioner or Ld. Principal Director General. Whereas for initiating the proceedings, the Assessing Officer has obtained the prior approval from Principal Commissioner of Income Tax-7, New Delhi which is not as per the provisions of the Act. In this regard, we draw support from the decision of the Hon’ble High Court of Delhi in the case of Kusum Healthcare (P) Ltd. vs. DCIT reported in 304 Taxman 471 wherein, in the relevant paras it has been held as under:- “4. Undisputedly, we are in this writ petition concerned with Assessment Year 2016-17 and in respect of which the notice under section 148 of the Act ultimately came to be issued on 29 July, 2022. It is thus apparent that the action had come to be initiated after the expiry of three years from the end of the relevant AY. It is in the aforesaid context that the petitioner contends that the sanction accorded by the PCIT would not sustain.

5.

In cases where assessment is sought to be commenced after the lapse of three years from the end of the relevant AY, undisputedly, it would be the Principal Chief Commissioner who would be liable to be recognized as being the competent authority. Viewed in that light, it is apparent that the reassessment action would not sustain……

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Consequently, and for the aforesaid reasons, we find ourselves unable to sustain the reassessment action on this short score alone.

7.

Accordingly, the writ petition is allowed. The impugned order referred to Section 148A(d) and notice under section 148, both dated 29.7.2022 are quashed. However, the present order shall be without prejudice to the right of the respondent to draw such other proceedings as may be permissible in law.”

5.

We further note that similar view was taken by various coordinate Benches in this regard and ITAT, Delhi Bench in the case of Durga Agencies Pvt. Ltd. in ITA No.4923/Del/2024 order dated 27.08.2025 held as under :- “Considered the rival submissions and the material placed on record. We observed that the Notice dated 29.07.2022 issued u/s 148 of the Act is not a valid notice, as the approval was not granted by the specified authority i.e. Principal Chief Commissioner of Income Tax as mandated u/s 151(ii) We further observe that the impugned notice u/s 148 for AY 2017-18 was issued on 29.07.2022, after obtaining the approval Pr.CIT, Delhi i.e. beyond the period of three years from the end of the relevant assessment year and thus, in terms of sec.151(ii) of the Act, the same was required to be approved by the Principal Chief Commissioner or Principal Director General or where there is no such authority, by Chief Commissioner or Director General. We further observe that in the case of the assessee, the said notice u/s 148 was not issued with the prior approval of the Principal Chief Commissioner or any other authority specified u/s 151(ii) of the Act. In this regard, we find force from the judgment of Hon’ble Delhi High Court in the case of Communist Party of India (Marxist) (supra) wherein Hon’ble Delhi High Court relying on various judgments decided the issue in favour of the assessee as under :-

“18. In view of the above, the order dated 29.07.2022 passed under section 148A(d) of the Act is not sustainable. Consequently, the subsequent proceedings, including the assessment order dated 23.05.2023, cannot be sustained. Accordingly, the 5 | P a g e

impugned order passed under section 148A(d) of the Act, the notice issued under section 13\48 of the Act as well as the assessment order dated 23.05.2023 and the demand raised pursuant thereto, are hereby set aside.” 6. Respectfully following the above decision, we are inclined to allow this legal ground raised by the assessee by setting aside the reassessment order on this count. 7. Apropos second contention of the Ld. AR is concerned, which is relating to initiation of proceedings u/s. 148 of the Act which is barred by limitation. It is submitted that this issue is no longer res-integra and covered by the decision of the Hon’ble Apex Court in the case of UOI vs. Rajeev Bansal reported in 469 ITR 46. It was submitted that the notice u/s. 148 of the Act was issued on 07.6.2021; notice u/s. 148A(b) of the Act was issued on 24.5.2022; order u/s.148A(d) of the Act was issued on 29.7.2022 and notice u/s. 148 of the Act was issued on 29.7.2022. Thus, it is abundantly clear that the notice 29.7.2022 is time barred. To support his contention, he stated that the above facts can be verified from the following table. S.No. Particulars 1. Assessment year 2016-17 2. First notice issued u/s. 148 of the Act 07.06.2021 3. Surviving time till 30.6.2021 (if less than 7 days, 23 days extended to 7 days as per proviso to section 149(1) of the Act 4. SCN issued u/s. 148A(b) of the Act in pursuance to the 24.5.2022 to directions of Hon’ble Apex Court in the case of Ashish be complied Agarwal dated 4.5.2022 reported in 444 ITR 1 (SC). on or before 7.6.2022 5. Period to be excluded as per para 110 of Rajeev Bansal 24.5.2022 to dated 3.10.2024 reported in 469 ITR 46 (SC) 7.6.2022 6. Reply filed on (if any) 03.06.2022 7. Period expired to issue notice u/s. 148 of the Act 26.6.2022 (03.6.2022 + 6 | P a g e

23 days) 8. Second notice issued u/s. 148 of the Act 29.7.2022

7.1 In view of above discussions, Ld. AR submitted that the AO issued the notice u/s 148 of the Act on 27-07-2022 which is time barred, in view of the decision of Union of India & Ors Vs. Rajeev Bansal (Supra) wherein, it has been held has as under: “110. The effect of the creation of the legal fiction in Ashish Agarwal (Supra) was that it stopped the clock of limitation with effect from the date of issuance of section 148 notices under the old regime {Which is also the date of issuance of the deemed notices}. As discussed in the preceding segment of the judgment, the period from the date of the issuance of the deemed notices till the supply of relevant information and material by the assessing officer to the assessee in terms of the direction issued by this court in Ashish Agarwal (Supra) has to be excluded from the computation of the period of limitation. Moreover, the period of two weeks granted to the assessee to reply to the cause notices must be excluded in terms of the third proviso to section 149. 111. The clock started ticking for the Revenue only after it received the response of the assessee to the show cause notices. After the receipt of the reply, the assessing officer had to perform the following responsibilities; (i) consider the reply of the assessee under section 149A(C); (ii) take a decision under section 149A(d) basd on the available material and the reply of the assessee; and (iii) issue a notice under section 148 if it was a fit case for reassessment. Once the clock started ticking, the assessing officer was see State of AP v. AP Pensioners Association, (2005) 13 SCC 161 [28]. [This court observed that the “legal fiction undoubtedly is to be construed in such a manner so as to enable a person, for whose benefit such legal fiction has been created, to obtain all consequences flowing thereform.”]

PART F required to complete these procedures within the surviving time limit. The surviving time limit, as prescribed under the Income Tax Act read with TOLA, was available to the assessing officers to issue the reassessment notices under section 148 of the new regime.

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112.

Let us take the instance of a notice issued on 1 May 2021 under the old regime for a relevant assessment year. Because of the legal fiction, the deemed show cause, notice will also come into effect from 1 May 2021. After accounting for all the exclusions, the assessing officer will have sixty–one days [days between 1 May 2021 and 30 June 2021] to issue a notice under section 148 of the new regime. This time starts ticking for the assessing officer after receiving the response of the assessee. In this instance, if the assessee submits the response on 18 June 2022, the assessing officer will have sixty-One days from 18 June 202 to issue a reassessment notice under section 148 of the new regime. Thus, in this illustration, the time limit for issuance of a notice under section 148 of the new regime will end on 18 August 2022.”

7.2 Ld. AR has submitted that in view of the observations of the Hon’ble

Supreme Court in the case of Rajeev Bansal (supra), the notice u/s. 148 is to be treated as barred by limitation and consequently the reassessment proceedings would be liable to be quashed as void ab initio.

8.

The Ld. CIT-DR relied upon the orders of the lower authorities.

9.

We have heard the revival contentions of the parties and gone through the

material available on record. In view of the aforesaid discussions, we find force in the contention of the Ld. AR that the Hon’ble Supreme Court in the case of

Rajeev Bansal (Supra) the extended due date for issuance of notice u/s 148 of

the Act expired and notice u/s 148 of the Act was issued on 29-07-2022, thus the said notice was time barred by limitation. Respectfully following the

aforesaid decision of the Hon’ble Supreme Court, we hold that the notice issued

u/s 148 of the Act on 29.7.2022 is time barred by limitation, hence, the same is

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quashed and consequently, the reassessment also quashed. Accordingly this

legal issue raised by the assessee is also allowed.

10.

Since we have decided the legal grounds in favour of the assessee, as

aforesaid, the other grounds have become academic and resultantly, the stay

application has become infructuous and dismissed as such.

11.

In the result, Assessee’s appeal is allowed and Stay Application is

dismissed.

Order pronounced in the Open Court on 29.04.2026.

Sd/- Sd/- (S. RIFAUR RAHMAN) (SUDHIR KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 29.04.2026

SR BHATNAGAR

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