KABIR FOODS PVT LTD,DELHI vs. ITO WARD 14(1), DELHI

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ITA 1275/DEL/2026Status: HeardITAT Delhi04 June 2026AY 2014-155 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 under Section 148 was issued beyond the limitation period prescribed by the Supreme Court in the case of Union of India vs. Rajeev Bansal. Consequently, the reassessment order was rendered unsustainable.

What were the facts?

The assessee's case was reopened under Section 147 based on information about a scheme to generate bogus Long Term Capital Gains (LTCG) and fictitious profits. A notice under Section 148 was issued, and the reassessment order confirmed additions of Rs. 27,49,289/- for bogus LTCG and Rs. 48,81,051/- for fictitious profits.

What were the issues?

The primary issue was whether the reassessment proceedings initiated by the issuance of notice under Section 148 were barred by limitation as per the Supreme Court's decision in Union of India vs. Rajeev Bansal.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘G’, NEW DELHI

Before: SH. SATBEER SINGH GODARA & SH. NAVEEN CHANDRA

For Appellant: Ms. Mansi Jain, Adv, Shri Siddharth bajaj, Adv.and Shri Tanishq Ahuja, Adv
For Respondent: Shri Ravi Kant Choudhary, Sr. D.R
Hearing: 21.05.2026Pronounced: 04.06.2026

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘G’, NEW DELHI BEFORE SH. SATBEER SINGH GODARA, JUDICIAL MEMBER AND SH. NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 1275/Del/2026 (Assessment Year : 2014-15) Kabir Foods Pvt. Ltd. Vs. ITO 1109, D-Mall, Netaji Subhash Ward – 14(1) Place, Pitampura, Delhi Delhi – 110 034 PAN No. AADCK 0595 J (APPELLANT) (RESPONDENT) Assessee by Ms. Mansi Jain, Adv., Shri Siddharth bajaj, Adv.and Shri Tanishq Ahuja, Adv. Revenue by Shri Ravi Kant Choudhary, Sr. D.R. Date of hearing: 21.05.2026 Date of Pronouncement: 04.06.2026

ORDER PER NAVEEN CHANDRA, ACCOUNTANT MEMBER : This captioned appeal has been filed by the assessee against the order of the learned Commissioner of Income Tax (Appeals)-NFAC, Delhi [‘CIT(A)’ in short] dated 20.01.2026 arising from the assessment order dated 18.05.2023 passed by the Assessing Officer, New Delhi

ITA No. 1275/DEL/2026 [A.Y 2014-15] Kabir Foods Pvt. Ltd. vs. ITO under Section 147 r.w.s 144B of the Income Tax Act, 1961 (‘the Act’) concerning Assessment Year (A.Y.) 2014-15.

2.

The grounds raised by the assessee are as under : 1. “On the facts and circumstances of the case, the order passed by National Faceless Appeal Centre (NFAC) is bad both in the eye of law and on facts. 2. On the facts and circumstances of the case, NFAC has erred both on facts and in law in confirming the order passed by the A.O., despite the same being initiated in violation of the statutory conditions of the Act and the procedure prescribed under the law and as such the same is bad in the eye of law and liable to be quashed. 3. (i) On the facts and circumstances of the case the re-assessment proceeding initiated by issue of notice u/s 148 is barred by limitation as per the provisions of section 149 of the Income Tax Act. (ii) That the notice under section 148 is bad in law being barred by limitation as provided by the hon'ble Supreme Court in the case of Union of India v. Rajiv Bansal, [2024] 469 ITR 46 (SC). 4. On the facts and circumstances of the case the reassessment notice issued u/s 148 is otherwise barred by the limitation as per the conditions laid down under clause b of sub sec 1 of section 149 of the Act. 5. (i) On the facts and circumstances of the case NFAC has erred both on facts and in law in confirming the addition of Rs. 27,49,289/- and Rs. 48,81,051/-made by the Assessing Officer/Assessment Unit on account of Bogus Long Term Capital Gain on sale of shares, to be not genuine and on account of fictitious profit earned. (ii) That the additions have been confirmed despite the assessee bringing on record all evidences and material to prove the genuineness of the transaction of actual sale of shares.iii) That the CIT(A) has erred in confirming the addition despite the transaction having been done through proper banking channels and as per the rules and regulations of the Stock Exchange. 6. That the appellant craves leave to add, amend or alter any of the grounds of appeal.” 3. Brief facts of the case are that the assessee, a Pvt. Ltd. company, had filed its return of income declaring a total income of Rs.4,22,850/-. The case was reopened under section 147 of the Act based on specific information that the assessee was a beneficiary of a

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ITA No. 1275/DEL/2026 [A.Y 2014-15] Kabir Foods Pvt. Ltd. vs. ITO pre-arranged accommodation entry scheme involving the manipulation of share prices of “penny stocks” to generate bogus LTCG and fictitious profits. Consequently, a notice under section 148 was issued after following the due process under section 148A. In response, the assessee filed its return of income on 14.06.2022 declaring the same income as originally filed. Thereafter, assessment was completed by the NFAC on 18.05.2023 under section 147 r.w.s 144B of the Act and made an addition of Rs.76,30,340/-, comprising Rs.27,49,289/- as alleged bogus LTCG and Rs.48,81,051/- as fictitious profit in equity transactions. 4. Aggrieved, assessee was in appeal before the learned CIT(A)/NFAC, which was rejected. Now, assessee is before us. 5. At the outset, learned Counsel of the assessee challenged the validity of notice u/s 148 and stated that the AO had issued notice u/s 148 of the Act on 30.06.2022 which is time barred in the light of the decision of the hon’ble Supreme Court in the case of Union of India vs. Rajeev Bansal, [2024] 469 ITR 46 (SC). 6. Per contra the ld DR relied on the orders of the AO/CIT(A)/NFAC. 7. We have heard the rival submissions and have perused the material on record. It is an admitted fact that the assessee was initially issued notice u/s 148 dated 29.06.2021 which in terms of TOLA

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ITA No. 1275/DEL/2026 [A.Y 2014-15] Kabir Foods Pvt. Ltd. vs. ITO and CBDT instruction, gives the surviving period of one day in terms of the decision of hon’ble Supreme Court in case of Rajeev Bansal. The assessee was issued a show cause notice u/s 148A(b) in light of Ashish Agarwal case of Hon’ble Supreme Court on 19.05.2022 which was replied to by the assessee on 31.05.2022. This leaves the surviving period of only seven days, till 07.06.2022, for passing order u/s 148A(d) and issuance of notice u/s 148 of the Act. We find that the AO passed an order u/s 148A(d) on 30.06.2022 and issued the notice u/s 148 on 30.06.2022. Thus, the AO has exceeded the surviving period for issuance of notice u/s 148 in accordance with the decision of Supreme Court in case of Rajeev Bansal. The notice u/s 148 of the Act is therefore quashed being barred by limitation. Accordingly, the resultant reassessment order u/s 147 is also rendered unsustainable in the eyes of law. Ground 3 is allowed. 8. In the result, appeal of the assessee ITA No. 1275/Del/2026 is allowed. Order pronounced in the open court on 04.06.2026

Sd/- Sd/- (SATBEER SINGH GODARA) (NAVEEN CHANDRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Date:- 04.06.2026 Priti Yadav, Sr. Ps*

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ITA No. 1275/DEL/2026 [A.Y 2014-15] Kabir Foods Pvt. Ltd. vs. ITO Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI

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