BANARSI DEVI,SIKAR vs. ITO WARD 1, SIKAR, SIKAR

IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, “SMC” BENCH, JAIPUR BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA No. 203/JPR/2026 (Assessment Year:2017-18)

Banarsi Devi Vs. ITO W/o Bhagwan Singh Ward 1 Akwa, Dhod Sikar Sikar �थायीलेखासं./जीआइआरसं./PAN/GIR No:CZTPD 9487Q Appellant .. Respondent

Appellant by : Sh. Shrawan Kr. Gupta, Adv.& Sh. Ashok Kr. Gupta, Adv. Respondent by : Mrs. Aarti Rawat, JCIT

Date of Hearing 16.07.2026 Date of Pronouncement 12.10.2026

O R D E R The present appeal has been filed by the assessee against the order passed by the National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as “Ld. CIT(A)”), dated 10.11.2025 u/s 250 of the Income Tax Act, 1961,(hereinafter referred to as “the Act”).

P a g e | 2 ITA No.203/JPR/2026 Banarsi Devi and various other reasons or bared by limitation and further contrary to the real facts of the case, hence the same may kindly be quashed.

2.1 Rs. 6,00,000/-: The Id. CIT(A) has grossly erred in law as well as on the facts of the case in confirming the addition of Rs.6,00,000/- made by the Id. AO U/s 69A as unexplained Money on account of alleged rent received from M/s Impulse Career Institute Sikar. The Ld. AO and CIT(A) have also erred in not considering the vital facts and material available on record in their true perspective and sense. Hence the addition so made by the Id. AO and confirmed by the Id.CIT (A) are also being contrary to the real facts of the case and not according to the provision of law, hence the same is illegal, bad in law, against the principle of natural justice the same may kindly be deleted in full.

2.2 The Id. CIT(A) and the Id. AO have also grossly erred in law as well as on the facts of the case in taxing the entire alleged rental income of Rs.6,00,000/- u/s 69A in place of income from House Property and also erred in not giving the deduction 30.00 percent deduction allowable as per law under the head income from rent, if the additions on account of rental income is sustained Thus the Id. AO and CIT(A) have also erred in not considering the vital facts and material available on record in their true perspective and sense. Hence the addition if any may kindly be directed to be made under the head income from house property and allow deduction as per act.

P a g e | 3 ITA No.203/JPR/2026 Banarsi Devi of Rs.6 lacs of rent from Impulse Career Institute. During assessment proceedings the assessee was confronted with the said information , to which she denied receiving any rental income during the year under consideration. The AO however added the amount of Rs. 6,00,000/-as unexplained money of the assessee applying the provisions of section 69A of the Act and charged interest u/s 115BBE of the Act thereon. 4. Aggrieved by the same, the assessee carried the matter before the Ld. CIT(A), who confirmed the order of the AO. 5. Before me, ld. Counsel for the assessee has raised a legal ground contending that the assessment order passed is barred by limitation. He contended that in the facts of the present case, initially notice u/s 148 of the Act of the old regime was issued on 23.06.2021 and thereafter in pursuance to the directions of the Hon’ble Apex Court in the case of UOI Vs. Ashish Agarwal reported in [2022] 138 taxmann.com 64(SC) dated May 04, 2022 notice u/s 148A(b) of the Act was issued to the assessee on 26.05.2022 seeking response by the 14th of June 2022. That assessee filed response to the same on 18th June 2022. Ld. Counsel for the assessee contended that the Hon’ble Apex Court in the case of Rajeev Bansal Vs. UOI [2024] 469 ITR 46 (SC) dated 22nd February 2023,had propounded the concept of surviving time available with the AO for issuing notice u/s 148 of the Act of the new regime , being the time remaining from the date of issuance of notice u/s 148 of the old regime after 01-04-2021 to 30-06-21, being the date of extension of limitation as per TOLA. That accordingly, the AO , in the facts of the present case had seven days time (from 23.06.2021 to

P a g e | 4 ITA No.203/JPR/2026 Banarsi Devi 30-06-21) for issuance of notice after receiving response of the assessee on 18th June 2022. And notice under the new regime therefore needed to be issued by 25th June 2022, however the same was issued on 25th July 2022 and accordingly the notice issued was barred by limitation. The contents of his submissions in this regard made in writing before me are reproducedhereunder:- A. Notice u/s 148 dated 29/07/2022 is time barred In this case it is pertinent to mention that the notice issued by the Ld. AO u/s 148 of the act dated 25/07/2022 is time barred and liable to be quashed. It is relevant to mention here that the Hon'ble Supreme Court in Ashish Agarwal (supra) created a legal fiction, which 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). That the period from the date of the issuance of the deemed notices till the supply of relevant information and material by theassessing 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.

responsibilities: (i) consider the reply of the assessee under section

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 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 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. TheHon'ble Supreme Court in the matter of Rajeev Bansal illustrated the manner of calculation for the limitation period and surviving time limit.

"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

P a g e | 5 ITA No.203/JPR/2026 Banarsi Devi assessing 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 18June 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."

We are reproducing this example along with the fact of this case in the tabular form hereunder:-

P a g e | 6 ITA No.203/JPR/2026 Banarsi Devi 7. I have heard the rival contentions. The fact that in the present case notice issued u/s 148A(b) of the Act was issued in pursuance to the direction of the Hon’ble Apex Court in the case of Ashish Agarwal (Supra) is not disputed. Undeniably, the Hon’ble Apex Court in the case of Rajeev Bansal (Supra) interpreted the applicability of the new law relating to reassessment u/s 147-151 of the Act ,applicable w.e.f 01-04-2021 to notices issued in lieu of the direction of the Hon’ble apex court in Ashish Agarwal (supra) and laid down the concept of surviving period for issuance of notice u/s 148 of the Act of the new regime after receiving reply of the assessee to notice u/s 148A(b) of the Act. The Hon’ble apex court held that the surviving period so available with the AO was the period between the date of issuance of notice u/s 148 of the Act of the old regime(applicable upto 31-03-2021) and the 30th June 2021 i.e. the date upto which the limitation for compliances was extended by TOLA. The relevant portion of the order of the Hon’ble Apex Court contained at para Nos.108-113 of the order, laying down the concept of surviving period for issuance of notice under the new regime of reassessment is as under: ….. 108. The Income Tax Act read with TOLA extended the time limit for issuing reassessment notices under Section 148, which fell for completion from 20 March 2020 to 31 March 2021, till 30 June 2021. All the reassessment notices under challenge in the present appeals were issued from 1 April 2021 to 30 June 2021 under the old regime. Ashish Agarwal (supra) deemed these reassessment notices under the old regime as show cause notices under the new regime with effect from the date of issuance of the reassessment notices. The effect of creating the legal fiction is that this Court has to imagine as real all the consequences and incidents that will inevitably flow from the fiction. 163 Therefore, the logical effect of the creation of the legal fiction by Ashish Agarwal (supra) is that the time surviving

P a g e | 7 ITA No.203/JPR/2026 Banarsi Devi under the Income Tax Act read with TOLA will be available to the Revenue to complete the remaining proceedings in furtherance of the deemed notices, including issuance of reassessment notices under Section 148 of the new regime. The surviving or balance time limit can be calculated by computing the number of days between the date of issuance of the deemed notice and 30 June 2021.

P a g e | 8 ITA No.203/JPR/2026 Banarsi Devi show cause notices will also come into effect from 1 May 2021. After accounting for all the exclusions, the assessing 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: (1) 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 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. ……. 8. In the facts of the present case admittedly, only seven days surviving period was available with the AO to issue notice u/s 148 of the Act, since the notice issued u/s 148 of the Act under the old regime was issued on 23rd June 2021 and the extension of limitation as per TOLA was 30th June 2021. The assessee had filed reply to the notice issued u/s 148A(b) of the Act of the new regime on 18th June 2022. Given seven days to issue notice therefore, the notice issued u/s 148 of the new regime ought to have been issued by the AO, as per the decision of the Hon’ble Apex Court in the case of Rajeev Bansal

P a g e | 9 ITA No.203/JPR/2026 Banarsi Devi (supra), by the 25th of June 2022 however; the AO has issued notice in the facts of the present case on 25.07.2022. 9. It is abundantly clear, therefore, that the notice issued u/s 148 of the Act in the present case is barred by limitation. The order passed by the AO is therefore is clearly without valid jurisdiction, and is therefore quashed as void ab initio. 10. Ground of appeal No. 1 is allowed. 11. Since I have quashed the assessment order passed, the other grounds of appeal raised by the assessee are not being dealt with by me, as they are mere academic in nature. 12. The appeal of the assessee is accordingly allowed. Order pronounced in the open court on 12.10.2026.

Sd/- (Annapurna Gupta) ACCOUNTANT MEMBER Dated 12.10.2026 Mittali, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT By Order, Asst. Registrar ITAT, Jaipur