ITO 8(2)(1), MUMBAI vs. SOLAR PACKAGING PVT. LTD., MUMBAI

आयकरअपीलीयअिधकरण�ायपीठमुंबईम�। IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI ANIKESH BANERJEE, JM & SHRI ARUN KHODPIA, AM I.T.A. No.4678-4679/Mum/2025 (Assessment Years: 2016-17& 2017-18) Solar Packaging Private Income Tax Officer – 8(2)(1) Room No.209, 2nd floor, Aayakar Limited 202, Ashford Chambers, Lady Vs. Bhawan, M.K. Road, Churchgate, Jamshedji Road, Mumbai, Mumbai-400020 Mahim H.O-400016 PAN: AAACS7342G Assessee- अपीलाथ� / Appellant Revenue-��थ�/ Respondent :

I.T.A. No.5268-5269/Mum/2025 (Assessment Years: 2016-17 & 2017-18) Income Tax Officer – 8(2)(1) Solar Packaging Private Limited Room No.209, 2nd floor, Aayakar 202, Ashford Chambers, Lady Vs. Bhawan, M.K. Road, Churchgate, Jamshedji Road, Mumbai, Mahim H.O- Mumbai-400020 400016 PAN: AAACS7342G Revenue- अपीलाथ� / Appellant Assessee -��थ�/ Respondent :

Assesseeby : Shri Mani Jain & Prateek Jain Revenueby : Shri Dhiraj Kumar (Sr. AR) Date of Hearing : 17.03.2026 Date of Pronouncement : 04.06.2026

O R D E R Per Bench: The aforesaid cross appeals are filed by the Assessee as well as the Revenue, against the order of Commissioner of Income Tax Appeals/ National

Faceless Appeal Centre (NFAC), Delhi [in short, “the Ld. CIT(A)”] both dated 18.06.2025, for the Assessment Years (AYs) 2016-17and 2017-18,which have been arises against the orders u/s 147 of the Income Tax Act, 1961 (in short, “the Act”) dated 18.05.2023 and 15.05.2023, passed by Assessment Unit, Income Tax Department (in short, “the Ld AO”).

Sr. AY AY Particulars No. 2016-17 2017-18 Date of notice issued u/s. 148 of the Act under old 1. 14.06.2021 21.06.2021 regime. Due date for issuance of notice under old regime 2. [Surviving period as per - Para 110 to 114 of Rajeev 30.06.2021 30.06.2021 Bansal (supra) – 16 days Notice issued by Ld. A.O. in compliance of the 3. decision of Hon'ble Supreme Court in the case of UOI 23.05.2022 19.05.2022 v. Ashish Agarwal (supra) supplying the information.

Sr. AY AY Particulars No. 2016-17 2017-18 4. Time limit granted under above notice to file reply 10.06.2022 06.06.2022 Date by which order u/s 148A(d) and notice u/s 148 of 16 days 9 days 5. the Act was required to be issued (as para no 110 to (26.06.2022 (15.06.202 114 of the decision in Rajeev Bansal (supra)) ) 2) Date of order u/s 148A(d) of the Act issued by Ld. 6. 29.07.2022 29.07.2022 A.O. 7. Date of notice u/s 148 of the Act issued by Ld. A.O. 29.07.2022 29.07.2022

“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 segments of this judgment, the period from the date of the issuance of the deemed notices till the supply of relevant information and material by the assessing officers to the assesses in terms of the directions 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 assesses to reply to the show cause notices must also 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 assesses to the show causes 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) based 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 A P v. A P 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 therefrom.”] 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. 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 notices will also come into effect from 1 May 2021. After accounting for all the exclusions, the assessing 4 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 2022 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. 113. In Ashish Agarwal (supra), this Court allowed the assesses to avail all the defences, including the defence of expiry of the time limit specified under Section 149(1). In the instant appeals, the reassessment notices pertain to the assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017, and 2017-2018. To assume jurisdiction to issue notices under Section 148 with respect to the relevant assessment years, an assessing officer has to: (i) issue the notices within the period prescribed under Section 149(1) of the new regime read with TOLA; and (ii) obtain the previous approval of the authority. PART G specified under Section 151. A notice issued without complying with the preconditions is invalid as it affects the jurisdiction of the assessing officer. Therefore, the reassessment notices issued under Section 148 of the new regime, which are in pursuance of the deemed notices, ought to be issued within the time limit surviving under the Income Tax Act read with TOLA. A reassessment notice issued beyond the surviving time limit will be time- barred. G. Conclusions 114. In view of the above discussion, we conclude that: a. After 1 April 2021, the Income Tax Act has to be read along with the substituted provisions; b. TOLA will continue to apply to the Income Tax Act after 1 April 2021 if any action or proceeding specified under the substituted provisions of the Income Tax Act falls for completion between 20 March 2020 and 31 March 2021; c. Section 3(1) of TOLA overrides Section 149 of the Income Tax Act only to the extent of relaxing the time limit for issuance of a reassessment notice under Section 148; d. TOLA will extend the time limit for the grant of sanction by the authority specified under Section 151. The test to determine whether TOLA will apply to Section 151 of the new regime is this: if the time limit of three years from the end of an assessment year falls between 20 March 2020 and 31 March, then the specified authority under Section 151(i) has extended time till 30 June 2021 to grant approval; e. In the case of Section 151 of the old regime, the test is: if the time limit of four years from the end of an assessment year falls between 20 March 2020 and 31 March 2021, then the specified authority under Section 151(2) has extended time till 31 March 2021 to grant approval;

f. The directions in Ashish Agarwal (supra) will extend to all the ninety thousand reassessment notices issued under the old regime during the period 1 April 2021 and 30 June 2021; g. The time during which the show cause notices were deemed to be stayed is from the date of issuance of the deemed notice between 1 April 2021 and 30 June 2021 till the supply of 5

relevant information and material by the assessing officers to the assesses in terms of the directions issued by this Court in Ashish Agarwal (supra), and the period of two weeks allowed to the assesses to respond to the show cause notices; and h. The assessing officers were required to issue the reassessment notice under Section 148 of the new regime within the time limit surviving under the Income Tax Act read with TOLA. All notices issued beyond the surviving period are time barred and liable to be set aside;PART C of the new regime between July and August 2022. Invalidation of the Section 148 notices issued under the new regime on the ground that they were issued beyond the time limit specified under the Income Tax Act read with TOLA will completely frustrate the judicial exercise undertaken by this Court in Ashish Agarwal (supra).” 7. In backdrop of aforesaid observations of the Hon’ble Apex Court, applying the emerging ratio to the dates of events in the present cases, we find that the order u/s 148A(d) and the notice u/s 148 for AY 2016-17 and 2017-18, both were issued on 29th July, 2022, whereas such orders/notices were supposed to be issued on or before 26.06.2022 and 15.06.2022,for the AY 2016-17 and 2017-18, respectively. Consequently, such notices, being issued beyond the prescribed timelines as prescribed and stipulated by Hon’ble Apex Court in the case of Rajeev Bansal (supra)are to be treated as invalid and non-est. Since, notices u/s 148 dated 29.07.2022 for both the AY’s under consideration are barred by limitation and are held to be in valid, the entire re-assessment proceedings as well as impugned orders are rendered as non est and bad in law. 8. We thus, in terms of our aforesaid observations on this legal aspect itself, are constrained to quash the impugned assessment orders u/s 147 dated 18.05.2023 for AY 2016-17 and dated 15.05.2023 for AY 2017-18. 9. Since we have set aside the notice u/s 148 on the ground of limitation and accordingly, the re-assessment proceedings are also quashed. The other grounds

raised by the assessee challenging the legality or on merits of the case are rendered to be academic. 10. In result, both the appeal of assessee in ITA Nos.4678/Mum/2025 & 4679/Mum/2025 are allowed in above terms. 11. Since the re-opening assessments in the present cases are held to be non- est and quashed on account of invalidity of the notices issued u/s 148 and want of valid jurisdiction, the contentions raised by the Revenue in their respective appeals become infructuous and need not be dealt with on merits. We therefore, dismiss the appeal of Revenue accordingly. 12. In combined result, both the appeals of assessee are allowed, whereas the appeals of Revenue are dismissed in terms of aforesaid observations.

Order pronounced in the open court on 04-06-2026.

Sd/- Sd/- (ANIKESH BANERJEE) (ARUN KHODPIA) JUDICIAL MEMBER ACCOUNTANT MEMBER

Mumbai, Dated : 04-06-2026. Ankit K., Sr. PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. DR, ITAT, Mumbai 4. Guard File 5. CIT BY ORDER,

(Dy./Asstt. Registrar) ITAT, Mumbai