REKHA GUPTA,NEW DELHI vs. ACIT INT. TAXATION 1(3)(1), DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘D’, NEW DELHI Before Sh. Vikas Awasthy, Judicial Member & Sh. Renu Jauhri, Accountant Member IT(IT)A No. 60/Del/2025 : Asstt. Year : 2016-17 Rekha Gupta, Vs ACIT, C/o Sanjiv Sapra & Associates LLP Circle Inter. Tax-1(3)(1), Chartered Accountants, New Delhi C-763, New Friends Colony, New Delhi-110025 (APPELLANT) (RESPONDENT) PAN No. BJGPG4144M Assessee by : Sh. Sanjiv Sapra, FCA Revenue by : Sh. Rohit Garg, CIT-DR Date of Hearing: 24.03.2026 Date of Pronouncement: 24.03.2026 ORDER Per Renu Jauhri, Accountant Member: The appeal filed by the assessee is directed against the final Assessment Order passed u/s 143C(13) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 10.11.2025 for A.Y. 2016-17.

2 IT(IT)A No. 60/Del/2025 Rekha Gupta b) Mere AIR information that there were cash deposits in the bank account could not be made the basis for reopening of assessment under section 147. c) Statutory notice u/s 148 as issued was time barred and issued beyond the permissible limitation period. d) Order u/s 148A(d) as issued is not based on any material on record which suggests escapement of income and neither any information or material was shared with the Appellant. e) Sanction obtained from specified authority prior to passing of order u/s 148A(d) was not provided to the Appellant alongwith such order and at any rate, such sanction as obtained appears to be mechanical and without application of mind. f) Reassessment proceedings conducted were in violation of the mandatory procedure as laid down and principles of natural justice. 2) That on the facts and circumstances of Appellant's case and in law, the AO/DRP has erred in making the following additions under section 69 of the Act: a) Rs.36,62,500 (being 50% share of Rs.73,25,000) on account of unexplained investment for purchasing immovable property bearing Unit No. B-4401, 44th Floor, Lodha, The Park Budhkar Marg, Worli, Mumbai. b) Rs.91,88,812 on account unexplained investment for purchasing immovable property bearing Flat No. 1401, Tower-4, Crescent Bay at Bhoiwada, Parel, Mumbai. At any rate, without prejudice, the aforesaid additions are very excessive. 3) That the levy of interest under section 234A of Rs.44,45,800 and under section 234B of Rs.51,57,128 is illegal and at rate very excessive. 4) That the total income as assessed at Rs.1,28,89,152 and the income tax demand of Rs. 140,48,825 as created thereon is very excessive. 5) That the initiation of penalty proceedings under section 271(1)(c) is wholly unwarranted and inapplicable to the facts and circumstances of Appellant's case, as there is neither any concealment nor furnishing of inaccurate particulars of income.

3 IT(IT)A No. 60/Del/2025 Rekha Gupta 6) That the Appellant reserves her right to add, amend/modify the grounds of objections.”

3.1 Aggrieved, the assessee is in appeal before the Tribunal. The assessee has raised a legal ground stating that the notice u/s 148 was time barred besides challenging the impugned addition on merits. We, therefore, first take up the legal issue relating to validity of the reopening on account of being time barred.

4 IT(IT)A No. 60/Del/2025 Rekha Gupta 4. Before us, ld. AR has submitted that the notice u/s 148 for A.Y. 2016-17 was issued on 16.04.2023 which was beyond permissible limitation period of 6 years. He submitted that the issue is covered by various decision of the Hon’ble jurisdictional High Court wherein the notices issued beyond 6 years for A.Y. 2016-17 have been quashed following the decision of the Hon’ble Apex Court in the case of UOI & Others Vs. Rajeev Bansal (2024) SCC Online (SC) 2693. Some of the decision of the Hon’ble jurisdictional High Court relied upon by the ld. DR are as under:

i. Manju Somani Vs. ITO 466 ITR 758 (Del.) ii. Sanjay Bansal Vs. ITO WP(C) 6660/2024 iii. Abhinav Jindal Vs. ACIT 476 ITR 330 iv. BPTP Ltd. Vs. CCIT 177 taxmann.com 655 (Del.)

4.1 Ld. AR has, therefore, argued that the impugned notice issued on 16.04.2023 was beyond the prescribed date i.e. 31.03.2023 and hence is liable to be quashed.

4.2 On the other hand, ld. DR has contended that the notice has been issued within the prescribed period. Relevant portion of the written submissions made by the ld. DR is reproduced below: “For A.Y. 2016-17, the assessee did not file any return of income. Subsequently, information was flagged by the Risk Management Strategy (RMS) system indicating

5 IT(IT)A No. 60/Del/2025 Rekha Gupta escapement of income chargeable to tax. Based on such information, proceedings under section 148A were initiated. A show cause notice under section 148A(b) was duly issued to the assessee on 03.03.2023 calling upon her to explain why notice under section 148 should not be issued. However, no reply or communication was received from the assessee in the matter. Thereafter, after considering the material available on record, the Assessing Officer passed an order under section 148A(d) dated 16.04.2023, holding that income chargeable to tax amounting to Rs.1,85,28,540/- had escaped assessment. It was specifically recorded that the escaped income exceeded Rs.50 lakh and was represented in the form of assets, including immovable property, bank transactions and payments to non- residents. Necessary approval of the specified authority under section 151(ii) of the Act was obtained before passing the order (Annexure A). Subsequently, the order under section along with 148A(d) notice under section 148 of the Act for A.Y. 2016-17 was issued on 16.04.2023. It is submitted here that the reopening proceedings were initiated as per procedure prescribed in the Income Tax Act, 1961. It is also submitted here that as per the amended provisions of section 149(1)(b) of the Act, notice under section 148 can be issued up to ten years from the end of the relevant assessment year, provided the Assessing Officer is in possession of information which reveals that income chargeable to tax, represented in the form of an asset, has escapee assessment and the amount of such income is Rs.50 lakh or more. In the present case the notice has been issued well within ten years from the end of A.Y. 2016-17, i.e. before 31.03.2027. Thus, on the basis of facts available on record and the applicable statutory provisions, it is respectfully submitted that the notice issued under section 148 dated 16.04.2023 is issued within the limitation period prescribed under section 149(1)(b) of the Act and is legally valid. The contention of the assessee that the impugned notice is barred b; limitation is, therefore, not supported by facts or law.” 5. We have heard the rival submissions and perused the material placed before us. We note that the show cause notice u/s 148A(b) was issued by the AO on 03.03.2023 to which no

6 IT(IT)A No. 60/Del/2025 Rekha Gupta response was filed by the assessee. Thereafter order u/s 148A(d) was passed on 16.04.2023 and notice u/s 148 was also issued on 16.04.2023. The prescribed time limit for issue of notice u/s 148 for A.Y. 2016-17 was 6 years which expired on 31.03.2023. We note that the issue is squarely covered by the decision of the Hon’ble Apex Court in the case of Rajeev Bansal (supra) wherein the revenue itself has accepted the time barring dates as under: “19.......... .............. d. TOLA does not extend the life of the old regime. It merely provides a relaxation for the completion or compliance of actions following the procedure laid down under the new regime; e. The Finance Act 2021 substituted the old regime for re-assessment with a new regime. The first proviso to Section 149 does not expressly bar the application of TOLA. Section 3 of TOLA applies to the entire Income Tax Act, PART C including Sections 149 and 151 of the new regime. Once the first proviso to Section 149(1)(b) is read with TOLA, then all the notices issued between 1 April 2021 and 30 June 2021 pertaining to assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017, and 2017-2018 will be within the period of limitation as explained in the tabulation below: Assessment Within 3 years Expiry of Within six Expiry of Year (2) Limitation years Limitation (1) read with (4) read with TOLA for (2) TOLA for (4) (3) (5) 2013-14 31.03.2017 TOLA not 31.03.2020 30.06.2021 applicable 31.03.2018 31.03.2021 2014-15 TOLA not 30.06.2021 applicable 31.03.2019 31.03.2022 2015-16 TOLA not TOLA not applicable applicable 31.03.2020 31.03.2023 2016-17 TOLA not TOLA not applicable applicable 31.03.2021 31.03.2024 2017-18 TOLA not TOLA not applicable applicable

7 IT(IT)A No. 60/Del/2025 Rekha Gupta 5.1 Accordingly, the Hon’ble Apex Court had held as under: “45. The first proviso to Section 149(1)(b) provides thus: “149. (1) No notice under section 148 shall be issued for the relevant assessment year, - (a) If three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b); (b) If three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in possession of books of account or other documents or evidence which reveal that the income chargeable to tax, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more for that year: Provided that no notice under section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 1st day of April 2021, if such notice could not have been issued at that time on account of being State of M P v. Kedia Leather & Liquor Ltd., (2003) 7 SCC 389 [15] Harshad S Mehta v. State of Maharashtra, (2001) 8 SCC 257 [31] PART E immediately beyond the time limit specified under the provisions of clause (b) of sub- section (1) of this section, as they stood immediately before the commencement of the Finance Act, 2021:” (emphasis supplied) 46. The ingredients of the proviso could be broken down for analysis as follows: (i) no notice under Section 148 of the new regime can be issued at any time for an assessment year beginning on or before 1 April 2021; (ii) if it is barred at the time when the notice is sought to be issued because of the “time limits specified under the provisions of” 149(1)(b) of the old regime. Thus, a notice could be issued under Section 148 of the new regime for assessment year 2021-2022 and before only if the time limit for issuance of such notice continued to exist under Section 149(1)(b) of the old regime.”

8 IT(IT)A No. 60/Del/2025 Rekha Gupta 5.2 Respectfully following the decision of the Hon’ble Apex Court, we hold that the notice u/s 148 issued on 16.04.2023 is beyond the prescribed time limit of 31.03.2023 and is therefore quashed. Since the re-assessment proceedings have been quashed, the remaining grounds have been rendered academic and, therefore, not being adjudicated upon.