RADHEY SHYAM SINGHAL ,DELHI vs. ITO WARD 44(1), DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “E”, NEW DELHI BEFORE SHRI VIMAL KUMAR, JUDICIAL MEMBER AND SHRI SANJAY AWASTHI, ACCOUNTANT MEMBER ITA No. 7471/Del/2026, A.Y. 2015-16 ITA No. 7472/Del/2026, A.Y. 2016-17 Radhey shyam Singhal Vs. ITO, 631-B, Gali No. 2 Ward 44(1), Sri Nagar Colony Delhi Delhi-110034, New Delhi �थायीलेखासं./जीआइआरसं./PAN/GIR No: ANUPS3611E Appellant .. Respondent Appellant by : Ms. Mansi Jain, Adv. Respondent by : Shri Tarun Sharda, Sr. DR Date of Hearing 22.09.2026 Date of Pronouncement 22.09.2026

O R D E R PER BENCH: The appeals filed by the assessee are against orders dated 13.05.2026 of ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [hereinafter referred to as “the CIT(A)”] under section 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) arising out against assessment orders dated 24.05.2023

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and 29.05.2023 of the ld. Assessing Officer/ assessment unit (hereinafter referred to as ‘the AO’) u/s 147 of the Act for A.Y. 2015-16 and 2016-17 respectfully.

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Ld. AO vide order dated 24.05.2023, assessed total income/ loss determined as Rs. 83,48,189/-.

2.1 Against order dated 24.05.2023 of Ld. AO, the assessee filed appeal before Ld. CIT(A) which was dismissed vide order dated 13.05.2023.

“1. On the facts and circumstances of the case, the order passed by the National Faceless Appeal Centre (NFAC) is bad, both in the eye of law and on the facts. 2. 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 Act. 3. On the facts and circumstances of the case the re-assessment proceeding initiated by issue of notice u/s 148 is bad in law in the absence of sanction of the proper authority as prescribed under section 151 of the Act. 4. 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 surviving period defined by hon'ble Supreme Court in the case of Union of India vs. Rajiv Bansal reported in (2024) 469 ITR 46 (SC). 5. (i) On the facts and circumstances of the case, the Id.NFAC. has erred both onfacts and in law in confirming the action of A.O. in computing the business income of the assessee at Rs. 83,06,563 as against Rs. 5,22,268/- declared by the assessee. (ii) That the above said addition was made arbitrarily at the rate of 0.5% as against the commission income actually earned by the assessee. (iii) On the facts and circumstances of the case, the NFAC. has erred in not providing the benefits of expenses claimed for earning the commission Income. 6. On the facts and circumstances of the case, the Id. NFAC has erred both on facts and in law in confirming the action of A.O. in drawing adverse inference against the

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assessee making the bank account of the assessee as basis, despite the fact that allegation made in order u/s 148A(d) have been proved to be wrong during the assessment proceedings itself. 7. Without prejudice to the above and in the alternative, On the facts and circumstances of the case, the IdNFAC. has erred both on facts and in law in rejecting the contention of the assesseethat the assessment was made in total disregard to the basic principle that the Income Tax has to be paid only on 'income' and not on receipts. 8. The appellant craves leave to add, amend or alter any of the grounds of appeal.” 4. Ld. Authorized Representative for appellant/assessee submitted that notice u/s 148 of the act dated 30.06.2022 is barred by limitation. Synopsis mentioned as under:

“The notice issued u/s 148 of the Act dated 30.06.2022 is barred by limitation Particulars Assessment Year 2015-16 Notice issued under the erstwhile provision 23.06.2021 Hon'ble SC order dt. 04.05.2022 in Ashish Agarwal's 04.05.2022 case deeming notice under section 148 issued under erstwhile law as Notice under section 148A(b) of New Law as amended by Finance Act, 2021 and directing that material/information be given in 30 days from date of the said order and assessee shall reply within two weeks thereafter. Notice u/s 148A(b) was issued in consequence of 18.05.2022 Hon'ble SC order Time limit to issue notice u/s 148 for the A.Y. 2015-16 31.03.2022 in consequence of judgment of Rajiv Bansal, wherein the department conceded in respect of A.Y. 2015-16 as the said A.Y. is not covered by TOLA.

Date of notice issued u/s 148 30.06.2022 If barred by limitation YES

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“19. Mr. N Venkataraman, learned Additional Solicitor General of India, made the following submissions on behalf of the Revenue: a. xxxx b. xxxx c. xxxx d. xxxx e. xxxx f. The Revenue concedes that for the assessment year 2015-16, all notices issued on or after 1st April, 2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA.” 7. In view of above well settled legal position, notice u/s 148 of the act dated 30.06.2022 being barred by limitation is set aside. Ground of Appeal No. 1 to 4 are accepted. Ground of Appeal No. 5 to 8 are left open.

ITA No. 7472/Del/2026, A.Y. 2016-17

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initiated as per procedural mentioned u/s 148A of the Act. Notice u/s 148 of the Act was served on assessee on 30.06.2022, notice u/s 148 of the Act dated 30.06.2022, notice u/s 142(1) of the Act dated 19.01.2023 were issued. The assessee filed ITR on 03.02.2023 u/s 148 of the Act. A notice u/s 143(2) of the Act dated 10.03.2023, notices u/s 142(1) of the Act dated 18.03.2023, 10.04.2023, show cause notice dated 17.05.2023 were issued. The assessee submitted replies. On completion of proceedings, Ld. AO vide order dated 29.05.2023 made addition of Rs. 52,46,161/-.

9.1 Against order dated 29.05.2023 of Ld. AO, the assessee filed appeal before Ld. CIT(A) which was dismissed vide order dated 13.05.2026.

“1. On the facts and circumstances of the case, the order passed by the National Faceless Appeal Centre (NFAC) is bad, both in the eye of law and on the facts. 2. On the facts and circumstances of the case the re-assessment proceeding initiated by issue of notice u/s 148 is bad in law in the absence of sanction of the proper authority as prescribed under section 151 of the Act.

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(ii) That the addition was made being 8% of the sales made to PAN group, ignoring the fact that these sales have already been taken into account by the assessee. (iii) That the abovesaid addition has been confirmed arbitrarily rejecting the explanation and documents provided by the assessee. 4. On the facts and circumstances of the case, the Id. NFAC has erred both on facts and in law in rejecting the contention of the assessee that the abovesaid addition on account of income from business was made without rejecting the books of accounts of the assessee. 5. The appellant craves leave to add, amend or alter any of the grounds of appeal.” 11. Ld. Authorized Representative for appellant/assessee submitted that approval u/s 151 of the Act is accorded by inappropriate Authority. In synopsis, it was submitted as under:

“The Assessment Year under consideration is AY 2016-17 Order u/s 148A(d) and notice u/s 148 was issued on 30.6.2022. The notice being issued beyond a period of 3 years, the approval should have been taken from PCCIT or CCIT, however, the approval has been taken from PCIT-15. Since the approval is accorded by an inappropriate authority, the notice u/s 148 becomes invalid and the consequent reassessment proceedings shall be quashed. Case Laws relied upon: -Union of India & Ors Vs. Rajeev Bansal, 2024 (10) TMI 264, SC -Communist Party of India (Marxist) vs. CIT(Exmp), (2025) 174 Taxmann.com 925 (Delhi), Delhi HC -Assotech moonshine Urban Developers Pvt. Ltd. Vs. Dy. CIT, ITA No. 3866/Del/2026, ITAT Delhi -Jus Infratech Private Limited Vs. ACIT, ITA No. 8803/Del/2025, ITAT Delhi”

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“This notice is being issued after obtaining the prior approval of the PCIT accorded on date 28.06.2022.” 14. Hon’ble Supreme Court of India in Rajeev Bansal in para 73 observed as under:

“Section 151 imposes a check upon the power of the Revenue to reopen assessments. The provision imposes a responsibility on the Revenue to ensure that it obtains the sanction of the specified authority before issuing a notice under Section 148 The purpose behind this procedural check is to save the assesses from harassment resulting from the mechanical reopening of assessments. A table representing the prescription under the old and new regime is set out below:

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Commissioner of Income Tax, which being invalid is set aside. Ground of Appeal No. 1 and 2 are accepted. Ground of Appeal No. 3 to 5 are left open.

Order pronounced in the open court on 22.09.2026.

Sd/- Sd/- (SANJAY AWASTHI) (VIMAL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated: 28.09.2026 Binita, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI