DY. COMMISSIONER OF INCOME TAX, SUBHASH ROAD, DEHRADUN vs. SAL REAL ESTATE PRIVATE LIMITED, GREATER KAILASH, NEW DELHI

ITA No.230/DDN/2026 SAL REAL ESTATE PRIVATE LIMITED, GREATER KAILASH

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “DB” NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER AND SHRI SANJAY AWASTHI, ACCOUNTANT MEMBER ITA No.230/DDN/2026 Assessment Year: 2015-16 DY. COMMISSIONER OF INCOME TAX, Vs. SAL REAL ESTATE PRIVATE 13-A, Subhash Road, LIMITED, Dehradun, Uttarakhand 248001. M-74, Greater Kailash, Part-II Market, New Delhi 110048, PAN No. AAICS5136N Appellant Respondent

Assessee by Shri Akash Ojha, Adv. Revenue by Shri Amar Pal Singh, Sr. DR (VC)

Date of hearing: 25.06.2026 Pronouncement on 03.07.2026 O R D E R PER SANJAY AWASTHI, ACCOUNTANT MEMBER: 1. This appeal arises from order dated 25.02.2026, passed u/s 250 of the Income Tax Act, 1961 (hereafter as “the Act”), by Ld. CIT(A)-NFAC.

1.1 In this case, the Revenue is aggrieved by the action of Ld. CIT(A) in holding that the notice u/s 148 of the Act issued on 27.07.2022 was barred by limitation. The Revenue has approached the ITAT with the following grounds of appeal as under: -

ITA No.230/DDN/2026 SAL REAL ESTATE PRIVATE LIMITED, GREATER KAILASH “1. On facts and circumstances of the case and in law, whether the Ld. CIT (A) has erred in holding that the notice issued under section 148 of the Income Tax Act, 1961 in this case on 27.07.2022 is barred by limitation, by incorrectly applying the provisions of section 149 as amended, and by ignoring that the case falls within the extended limitation period of ten years. 2. On facts and circumstances of the case and in law, whether the Ld. CIT (A) is justified in invoking the 3rd proviso to section 149 of the Income Tax Act, 1961 as provisions determining or restricting the limitation period, whereas the said proviso merely provide for exclusion and procedural extension of time and cannot override or curtail the limitation prescribed under section 149(1) of the Income Tax Act, 1961. 3. On facts and circumstances of the case and in law, whether the Ld. CIT (A) has erred in computing limitation with reference to the pre-amended provisions and in deriving an artificial cut-off date, thereby rendering the impugned notice issued under section 148 of the Income Tax Act, 1961 as time-barred, which is contrary to the scheme of the Act and unsustainable in law. 4. That, the appellant craves leave to add or amend any other more ground of appeal as stated above as and when needs for doing so may arise.” 2. Before us the Ld. DR took us through the scheme of sections 147/148 of the Act and stated that the Ld. CIT(A)’s findings were contrary to the law in force, especially the provisions of section 149 of the Act.

2.1 The Ld. AR, on the other hand, relied on the findings of Ld. CIT(A) on pages 24 & 25, whereby the notice u/s 148 of the Act has been held to be time barred.

ITA No.230/DDN/2026 SAL REAL ESTATE PRIVATE LIMITED, GREATER KAILASH “4.1 The undisputed facts emerging from the record are that an initial notice under section 148 (old provisions) was issued on 23.06.2021. Pursuant to the judgment of the Hon'ble Supreme Court in the case of Union of India vs. Ashish Agarwal, such notices were to be treated as show cause notices under section 148A(b). In compliance thereof, the Assessing Officer issued a communication dated 31.05.2022 furnishing the information relied upon and granted the appellant two weeks' time to file its reply. Thereafter, order under section 148A(d) and notice under section 148 were Issued on 27.07.2022. 4.2 The appellant has contended that as per section 149, the maximum time available to issue notice was only up to 24.06.2022 and, therefore, the notice dated 27.07.2022 is time barred. It is further argued that in view of the 3rd Proviso to section 149, only the time allowed to the assessee in response to notice under section 148A(b) can be excluded and even after such exclusion, 27.07.2022 falls beyond the permissible period. lon, the notice issued on 4.3 I have carefully considered the submissions of the appellant and examined the statutory provisions. The 3rd Proviso to section 149 provides that for the purpose of computing the period of limitation, the time assessee under section 148A(b), or the period during which proceedings are stayed by any court, shall be excluded. In the present case, the communication under section 148A(b) was issued on 31.05.2022 granting two weeks' time to the appellant. Thus, the period of limitation would stand extended only by the period actually allowed to the assessee for furnishing its reply. 4.4 Even if the benefit of exclusion of such period is granted, the outer time limit available under section 149 cannot be stretched indefinitely. The statute does not provide for exclusion of the entire period consumed by the department in passing order under section 148A(d), but only the period allowed to the assessee for responding. The record shows that the notice under section 148 was ultimately issued on 27.07.2022, which is beyond the period otherwise available under section 149, even after granting exclusion of the two weeks allowed to the appellant. 4.5 The scheme of limitation under section 149 is mandatory in nature and goes to the root of jurisdiction. Once the prescribed time limit expires, the Assessing Officer loses jurisdiction to issue notice under section 148. In the present case, the notice dated 27.07.2022 having been issued beyond the permissible time as computed in accordance with section 149 read with the 3rd Proviso thereto, is barred by limitation. 4.6 Accordingly, Ground No. 3.4 of the appeal is allowed, and the notice issued under section 148 dated 27.07.2022 is held to be time

ITA No.230/DDN/2026 SAL REAL ESTATE PRIVATE LIMITED, GREATER KAILASH barred and invalid without jurisdiction. Consequently, the reassessment proceedings initiated in pursuance thereof and the assessment order passed under section 147 read with section 144B are quashed.” We find that the Ld. CIT(A) has correctly interpreted the law on the subject and has thereafter granted relief. We do not deem it necessary to interfere with this finding (supra).

Order pronounced in the open court on 03.07.2026

Sd/- Sd/- (ANUBHAV SHARMA) (SANJAY AWASTHI) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 03.07.2026 *Kavita Arora, Sr. P.S. Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI