GAZANTLAXMI INFRASTRUCTURE LOGISTIC,SANVORDEM, SANGUEM-GOA vs. INCOME TAX OFFICER, PANAJI- GOA

The assessee has also raised alternative plea through synopsis of submission dated 20.08.2026, which reads as under :

Facts of the case, in brief, are that the assessee is a partnership firm and has not filed its return of income for the period under consideration. On the basis of information available with the Department that the assessee has received payment of Rs.5,81,45,510/- on which TDS u/s 194C of the IT Act has been deducted being payment made to contractors and also made cash

Being aggrieved with the above assessment order, the assessee preferred an appeal before Ld. CIT(A)/NFAC. After considering the reply and submissions of the assessee, Ld. CIT(A)/NFAC disposed the appeal by restoring the matter back to the file of the Assessing Officer to pass assessment order afresh.

It is the above order against which the assessee is in appeal before this Tribunal.

We have heard Ld. Counsels from both the sides and perused the material available on record including the paper book furnished by the assessee. In this regard, we find that the assessee has raised alternative ground which is legal in nature that the notice issued u/s 148 of the IT Act is time barred in the light of judgement of Hon’ble Supreme Court passed in the case of UOI vs. Rajeev Bansal [2024] 167 taxmannc.om 70 (SC).

In this regard, we find that the Hon’ble Supreme Court in Rajeev Bansal (supra) held that the surviving time under the IT Act read with TOLA will be available to the Revenue to complete the remaining proceedings in furtherance of the deemed notice,

Therefore, the surviving/balance time limit can be calculated by computing the number of days between the date of issuance of deemed notice and 30.06.2021. In order to compute the surviving/balance time in the instant case in hand, as per the 7 decision of the Hon’ble Supreme Court in paragraph-108, it is relevant to note the following dates: - S.No. Particulars Dates 1 Period of Limitation under the Old Act 31.03.2021 2 First Notice issued u/s 148 29.06.2021 3 Extended Limitation as per the TOLA 30.06.2021 4 Surviving Time 1 Days 5 Date Of Decision of Ashish Agarwal 04.05.2022 6 Notice u/s 148A(b) 25.05.2022 7 Assessee’s Reply due in two weeks’ time 09-06-2022 (25.05.2022 + 15 days) 8 Surviving Time Limit (Original 148 notice 10-06-2022 issued on 29.06.2021 minus 30.06.2021) 1 days + 09.06.2022 10 Need to extend time limit upto 7 days since 16-06-2022 surviving time limit of only 1 days remaining (7 days + 09.06.2022) as per proviso to section 149(1)(b) of the IT Act. 11 Assessee filed reply Not filed 12 Order U/s 148A(d) 29.07.2022 13 Fresh notice u/s 148 30.07.2022

Form perusal of above chart, we find that the surviving/balance time limit in the instant case, the Revenue had only ‘1’ days surviving time limit (i.e. between 29.06.2021 to 30.06.2021) to issue fresh notice u/s 148 of the IT Act of the new regime in the present case. Therefore, in the light of proviso to section 149(1)(b) of the IT Act, further 7 days time is required to be allowed to the Assessing Officer to issue notice u/s 148 of the IT Act which is available upto 16.06.2022, however, the order u/s 8 148A(d) was passed on 29.07.2022 & fresh notice u/s 148 of the IT Act was issued on 30.07.2022, which is admittedly beyond the surviving time limit which was available till 16.06.2022 only as per above chart. Admittedly, in the present case, the fresh notice u/s 148 of the IT Act was issued on 30.07.2022, i.e., 44 days after the surviving/balance time period, therefore, the notice issued u/s 148 of the IT Act is time barred, as per the decision of Hon’ble Supreme Court in Rajeev Bansal (supra).

In this regard, we also find support from the judgement passed by Hon’ble Bombay High Court in the case of Gurpreet Singh vs. Deputy Commissioner of Income-tax [2025] 176 taxmann.com 673 (GOA)[08-05-2025] wherein under identical facts the notice issued u/s 148 of the IT Act for Asstt Year 2013-14 was declared as barred by limitation and, thus, reassessment proceedings and consequential assessment order were also quashed, by observing as under :-

Although multiple grounds as mentioned above have been raised in the writ petition, the learned Advocate for Petitioner has limited his challenge to the point that the order under Section 148A(d) and the notice under Section 148 dated 29/07/2022 was time barred in view of the first proviso to substituted Section 149 as interpreted by the Hon'ble Supreme Court in Ashish Agarwal and Rajeev Bansal (supra). Reliance is also placed on the Delhi High Court judgement in Ram Balram Buildhome (P.) Ltd. v. ITO [2025] 171 taxmann.com 99 (Delhi)/2025 SCC OnLine Del 481 to contend that on identical facts and consistent with the interpretation of the Petitioner in the instant case, order under 9 Section 148A(d) and notice under Section 148 were quashed. It is urged that the remainder period as per the ratio of the decision in Rajeev Bansal (supra) was only 2 days and that the period of 2 days expired on 23/07/2022. This conclusion could be drawn after considering all the exclusions contemplated under 3rd proviso to substituted Section 149 and the exclusions directed by the Hon'ble Supreme Court in the case of Ashish Agarwal (supra) as interpreted in case of Rajeev Bansal (supra). The notice dated 29/07/2022 was thus liable to be quashed.

The respondents have canvassed oral arguments and have filed a synopsis of arguments based on the petitioner's submissions. According to the Respondents and as indicated in the written synopsis : (i) The assessment re-opened is valid within the meaning of the provisions of Section 147 of the IT Act. Hence, the further proceedings are valid as the same are initiated within the time limitation as notified under the TOLA extending the time limit till 30/06/2021 for re-opening the assessment vide Notification No.38/2021/ F.No.370142/35/2020-TPL. (ii) That the Government of India notified the TOLA on 29/09/2020. That in view of the TOLA, any notices and orders or compliances for which the due date falls until 31/12/2020 were extended to 31/03/2021, and further thereafter again the same was extended till 30.6.2021. (iii) That the Central Board of Direct Taxes - CBDT Notification under the TOLA dated 31/12/2020 extended the time limit from 31/12/2020 to 31/03/2021. The CBDT's Notification dated 31/03/2021 extended the date from 31/03/2021 to 30/04/2021. Subsequently, again, CBDT's Notification dated 27/4/2021 extended the time barred period from 30/04/2021 to 30/06/2021. (iv) That the time limit to re-open the proceedings in the present case within the meaning of Section 147 had been extended to 30/06/2021 and that the first notice under Section 148 of the IT Act dated 29/06/2021 was issued within the extended statutory time limit. The notice under Section 148A(b) of the IT Act was issued to the petitioner on 20/05/2022, the objections raised by the petitioner were also disposed of by passing the order under Section 148A(d) of the IT Act on 29/07/2022 which was within the permissible time limit. (v) That accordingly, the notice under Section 148 of the IT Act was issued after getting prior approval from the Competent Authority.

At the outset, it needs to be clarified that although reference is made to the above judgments at para 17 of the written synopsis, the following is stated: i. The Hon'ble Supreme Court in the case of Rajeev Bansal (supra) has set aside the decision of the Allahabad High Court which had quashed the re-opening notices for the AYs 2013-14 and other years as time barred under the Amended provisions of the IT Act (as amended from 1-4-2021). ii. The decision of this Court in New India Assurance Company Ltd (supra) for AY 2013-14 which was followed in Virendra Ship Recyclers and Sanman Impex Ltd. (supra) were set aside by the Hon'ble Supreme Court based on Rajeev Bansal (supra). iii. The decision of the Gujarat High Court in Ashish Acharatlal Varaiya (supra) for AY 2013-14 was also set aside by the Hon'ble Supreme Court based on Rajeev Bansal's (supra). iv. The decision of this Court in New India Assurance Co. Ltd. (supra) which was followed in Hexaware Technologies (supra) for the same AYs 2013-14 by this Court quashing the re-opening notices on this and other grounds were now subject matter of challenge before the Hon'ble Supreme Court in Pr. CIT v. Hexaware Technologies Ltd. [SLP (C) No. 21188 of 2024].

In view of the controversy involved, it is necessary to refer to the decisions in Ashish Agarwal and Rajeev Bansal (supra). Since the decision in Ashish Agarwal (supra) has been considered in Rajeev

The third proviso to Section 149 allows the exclusion of time allowed for the assessees to respond to the show-cause notice under Section 149A(b) to compute the period of limitation. The third proviso excludes "the time or extended time allowed to the assessee". Resultantly, the entire time allowed to the assessee to respond to the show-cause notice has to be excluded for computing the period of limitation. In Union of India v. Ashish Agarwal, this Court provided two weeks to the assessees to reply to the show-cause notices. This period of two weeks is also liable to be excluded from the computation of limitation given the third proviso to Section 149. Hence, the total time that is excluded for computation of limitation for the deemed notices is : (i) the time during which the show-cause notices were effectively stayed, that is, from the date of issuance of the deemed notice between April 1, 2021 and June 30, 2021 till the supply of relevant information or material by the Assessing Offices to the assessees in terms of the directions in Union of India v. Ashish Agarwal ; and (ii) two weeks allowed to the assessees to respond to the show-cause notices. "

It further held in paragraphs 108, 111 and 113 as under :- "108........... Therefore, the logical effect of the creation of the legal fiction by Union of India v. Ashish Agarwal is that the time surviving under the Income-tax Act read with Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 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 June 30, 2021. 111. The clock started ticking for the Revenue only after it received the response of the assessees to the show-causes

Thus, the effect of the judgment in Ashish Agarwal (supra) was that whilst upholding the contention of the assesses that from 01/04/2021, the new regime applied and the issuance of notices under the old regime were contrary to law, the Hon'ble Supreme Court in exercise of powers under Article 142 of the Constitution of India directed that notices issued under Section 148 of the old regime be construed as notices under Section 148A(b) of the new regime and the enquiry contemplated under Section 148A(a) was done away with as a one-time measure. The Assessing Officers were directed to provide the information and material relied upon by the Revenue to the assesses within a period of thirty days to enable the assesses to respond to the notice within a period of two weeks after which Assessing Officer had to pass an order under Section 148A (d) of the IT Act. The Hon'ble Supreme Court expressly observed that all defences available under Section 149(a) of the IT Act would continue to be available to all the assessees. However, in the said judgment, the Hon'ble Supreme Court did not delve into the aspect whether reassessment notices were within the time stipulated under the IT Act read with TOLA and the Notifications issued thereunder.

The decision in Ashish Agarwal (supra) was extensively considered by the Supreme Court in Rajeev Bansal (supra). The ratio laid down in the said judgment is pivotal to the issues involved in the present case and both parties have been extensively heard on the implications of the said judgment on the case in hand. In fact, the Petitioner has conceded

The Hon'ble Supreme Court in the case of Rajeev Bansal (supra) concluded as under : a. After 01/04/2021, the IT Act has to be read along with substituted provisions, b. TOLA would continue to apply to the IT Act after 01/04/2021 if any action or proceeding specified under the substituted provisions of the IT Act falls for completion between 20/03/2020 and 31/03/2021; c. Section 3(1) of the TOLA overrides Section 149 of the IT Act only to the extent of relaxing the time limit for issuance of a reassessment notice under Section 148; d. The TOLA would extend the time limit for the grant of sanction by the authority specified under Section 151. The test to determine whether the TOLA would apply to Section 151 of the new regime is that: if the time limit of three years from the end of an assessment year falls between 20/3/2020 and 31/03/2021, then the specified authority under Section 151(1) has extended time till 30/06/2021 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 20/03/2020 and 31/03/2021, then the specified authority under Section 151(2) has extended time till 31/03/2021 to grant approval; f. The directions in Ashish Agarwal (supra) would extend to all the reassessment notices issued under the old regime during the period 1/4/2021 and 30/06/2021; g. The time during which the show-cause notices were deemed to be stayed would be from the date of issuance of the deemed notice between 01/04/2021 and 30/06/2021 till the supply of relevant information and material by the Assessing Officers to the assessees in terms of the directions issued in Ashish Agarwal (supra), and the period of two weeks allowed to the assessees to respond to the show- cause notices, and h. The Assessing Officer was required to issue the reassessment notice

As stated earlier, the instant case is premised on ratio laid down in the case of Rajeev Bansal (supra) and the applicability of the principles laid down to the facts of the present case. The sequence of events in the case in hand is as under : Sr.No. Date Event 1 29/06/2021 Notice under erstwhile Section 148 (deemed to be under new Section 148(b)) 2 04/05/2022 Judgment of the Hon'ble Supreme Court in Ashish Agarwal (supra) 3 20/05/2022 Notice conveying reasons for reopening and relied- upon material 4 03/06/2022 Reply filed by Petitioner to notice under Section 148A(b) 5 04/06/2022 Two weeks elapsed from issuance of Notice under Section 148A(b) 6 28/06/2022 Second reply filed by Petitioner to Notice under Section 148A(b) 7 14/07/2022 Notice of change of incumbent and grant of additional one week time to file reply 8 21/07/2022 Additional one-week time elapsed 9 29/07/2022 Order passed under Section 148A(d) 10 29/07/2022 Notice issued under Section 148 11 07/05/2023 SCN Notice under Section 147 12 29/05/2023 Order under Section 147

In terms of the decisions in Ashish Agrawal and Rajeev Bansal (supra), the following position emerges in the context of the present case :- (i) The period for subject reassessment in terms of Section 149 of the old regime is deemed to be extended till 30/06/2021 under the TOLA. (ii) The notice dated 29/06/2021 would be deemed to be notice under 16 Section 148A(b). (iii) The surviving period by excluding the date of re-issuance of notice on 29/06/2021 would be the remainder days in the month of June 2021 (30/06/2021 - 28/06/2021), namely, two days. (iv) On 30/06/2021, the extension in terms of the TOLA would come to an end. (v) The period that stands excluded is : (a) The period up to 30/06/2021, which is covered by the provisions of the IT Act read with the TOLA. (b) The period from 01/07/2021 to 03/05/2022 being the period before the decision of the Hon'ble Supreme Court in Ashish Agarwal (supra). (c) The Period from 04/05/2022 till 20/05/2022, which is the date when the material was furnished and the reasons for reopening were given to the Petitioner. (d) The period of two weeks time for reply to be filed by the Petitioner, which ended on 04/06/2022 and the extended time to file reply (additional reply was filed by the Petitioner on 28/06/2022). Further extension was given to the Petitioner in pursuance to notice dated 14/07/2021 giving additional time of one week in view of change in the incumbent to the Office, which period ended on 21/07/2022. 16. By considering all the exclusions, the remainder days for conclusion of the procedure for passing of an order in terms of Section 148A(d) and issuance of notice under Section 148 would be two days from 21/07/2022 and the same would expire of 23/07/2022. Applying the ratio of the decisions in Ashish Agarwal and Rajeev Bansal (supra) in the context of the 1st proviso to Section 149 we are therefore of the opinion that the notice under Section 148 dated 29/07/2022 is time barred. The order under Section 148A(d) as well as the notice issued under Section 148 are dated 29/07/2022 which is much after the surviving period which expired on 21/07/2022. 17. In light of the above, the contentions raised by the Revenue lack foundation in terms of law. Although the Revenue has contended that 17 the order dated 29/07/2022 passed under Section 148A(d) and the notice issued under Section 148 were within the timelines contemplated by the decisions in Ashish Agarwal and Rajeev Bansal (supra), the same lacks substance. In the written synopsis, an attempt was made to justify the timelines by contending that in terms of Section 148A(d), the period mandated for passing of the order was within one month from the end of the month in which the reply referred to is received or where no such reply is furnished within one month from the end of the time by which the extended time allowed to furnish reply as per clause (b) expired. Relying on the said provision it was contended that the replies are dated 03/06/2022 and 28/06/2022 and going by the same, the end of the month would be 30/06/2022. Hence the expiry of time would be on 31/07/2022. It is therefore contended that the order is passed within the one month time contemplated under Section 148A(d).

The said contention is fundamentally misconceived. A notice under Section 148 of the IT Act accompanied by an order under Section 148A(d) is required to be issued within the time stipulated under Section 149 of the IT Act. Section 148A(d) does not govern the computation of time as contemplated in terms of Section 149 of the IT Act. The entire process under Section 148A(a) to (d) and the issuance of notice under Section 148 has to be completed within the total time available in terms of Section 149(1) of the IT Act for issuance of notice under Section 148. A notice issued under Section 148 of the IT Act which is beyond the time line stipulated under Section 149(1) is non- complaint and invalid. The timeline under Section 148A(d) is for the Assessing Officer to comply with the stipulations and the streamlining contemplated under Section 148A. This is primarily to bring in transparency and accountability into the system and is intended for the benefit of the assessees. However to suggest that Section 148A(d) extends the time limit under Section 149(1) and/or has a bearing on the time under Section 149(1) is a submission which is misconceived and lacks legal sanctity.

It was urged by the Revenue that the decision of this Court in Hexaware Technologies Limited (supra) was under challenge before the Hon'ble Supreme Court and hence the Court could consider awaiting its outcome. The decision in Hexaware Technologies Limited has not been stayed. Since we have proceeded on the basis of the law laid down in Ashish Agarwal and Rejeev Bansal (supra), this contention cannot be accepted. Reference to various decisions has been made. In fact, the decisions referred to are inconsistent with the case set up by the Respondents. Except for the decision in Ashish Acharatlal Varaiya (supra), other judgments are rendered prior to the decision in Rajeev Bansal (supra) and /or do not consider the said decision. Hence the said judgments do not in any manner assist us in deciding the 18 controversy in issue especially in the context to the limited issue that is raised by the Petitioner herein.

At this point we deem it appropriate to note that the Delhi High Court in the case of Ram Balram Buildhome (P.) Ltd. v. ITO [2025] 171 taxmann.com 99 (Delhi)/2025 SCC OnLine Del 481 dealt with an identical issue. It considered the principles laid down in Ashish Agarwal and Rajeev Bansal (supra) and concluded that the notice issued under Section 148 under the IT Act was time barred. In the facts of that case as well, the AY was 2013-2014 and the notice under Section 148 issued to the assessee was dated 01/06/2021. The date of furnishing material to the Petitioner in that case was 30/05/2022. The said Petitioner furnished its response to the notice under Section 148A(b) of the IT Act on 13/06/2022. In this factual backdrop, the Delhi High Court applying the ratio of the decisions in Ashish Agarwal and Rajeev Bansal (supra) came to the conclusion that the remainder period with the Assessment Officer was twenty-nine days from 01/06/2021 when the reassessment proceedings commenced for issuing notice under Section 148 of the IT Act. The limitation for passing of the order under Section 148A(d) expired on 12/07/2022. Accordingly, the notice under Section 148A of the IT Act issued on 30/07/2022 was held to be beyond limitation and the same was quashed. The Delhi High Court also relied on the observations made in the case of Raminder Singh v. Asstt. CIT [2023] 156 taxmann.com 148/[2024] 461 ITR 368 (Delhi)/2023 DHC 6672-DB wherein it was held that one month from the end of the month in which the time available to the assessee to respond to the notice under clause (b) of Section 148A expires is available to the Assessment Officer to pass an order under Section 148A(d) of the IT Act. It was further held that notice under Section 148 of the IT Act that is not accompanied by an order under Section 148A(d) of the Act would be non-compliant with the IT Act and no such notice could be issued beyond the period as specified under Section 149(1) of the IT Act. This decision of the Delhi High Court is consistent with our view based on the interpretation of the decisions in Ashish Agarwal and Rajeev Bansal (supra).

For all these reasons, we hold that the notice dated 29/07/2022, issued by Respondent no.1 under Section 148 of the IT Act is beyond the time period specified under Section 149(1) of the IT Act. It is therefore quashed. Consequently, the impugned assessment order dated 29/05/2023 passed on the basis of the impugned notice also stands quashed and set aside. Rule is made absolute in aforesaid terms with no order as to costs.”

The above judgement in the case of Gurpreet Singh (supra) was subsequently followed by Hon’ble Bombay High Court in the case of Hitesh Ramniklal Shah vs. Assistant Commissioner of Income-tax [2025] 180 taxmann.com 642 (Bombay) wherein, Hon’ble Court under identical facts allowed the appeal filed by the asessee by observing as under :- “26. After considering the above exclusion period, we observe that the remaining days for conclusion of the procedure for passing of an order in terms of Section 148A(d) and issuance of the notice under Section 148 of the Act would be two days. In the present case, whichever way we see it, the period of two days would expire on 10 June 2022 or 27 June 2022 respectively and, therefore, the notice under Section 148 of the Act issued on 27 July 2022 is time barred, inasmuch as it is issued much after the surviving period. We concur with the judgments of the co-ordinate bench in Gurpreet Singh (supra), of the Delhi High Court in Ram Balram Buildhome (P.) Ltd (supra) and the Gujarat High Court in Dhanraj Govindram Kalle (supra) which have dealt with the surviving period and quashed the notices issued under Section 148 of the Act passed beyond the surviving period.

In view of the above, it is apparent that Respondent No.1 has acted beyond juri iction and we accordingly set aside the impugned notice issued under Section 148 of the Act as well as all the subsequent notices issued under Section 142(1) and the show cause notice on the above ground. The other contentions raised by the Petitioner are kept open.”

Respectfully following the judgement of Hon’ble Bombay High Court in the case of Gurpreet Singh (supra) and Hitesh Ramniklal Shah (supra), we are of the considered opinion that the notice dated 30.07.2022 issued u/s 148 of the amended IT Act is 20 barred by limitation period specified by Hon’ble Supreme Court in the case of Rajeev Bansal (supra) u/s 149(1)(b) of the IT Act accordingly, we declare the impugned notice dated 30.07.2022 issued u/s 148 of the IT Act as void ab initio and bad in law, therefore, the same is quashed. Consequently, the entire re-assessment proceedings and assessment order dated 03.05.2023 passed u/s 147 r.w.s. 144 r.w.s. 144B of the IT Act are also quashed. Thus, the alternative ground, that the notice u/s 148 is time barred being issued beyond surviving time period as per Hon’ble Supreme Court in the case of Rajeev Bansal (supra), raised by the assessee is allowed. Since we have quashed the reassessment notice and consequential reassessment order by allowing alternative ground raised by the assessee, the remaining grounds raised by the assessee becomes infructuous hence not adjudicated by us.

In the result, the appeal filed by the assessee is allowed. Order pronounced on this 27th day of October, 2026. (MANISH BORAD) JUDICIAL MEMBER पुणे / Pune; "दनांक / Dated : 27th October, 2026. Sujeet/DOC Sujeet Kumar Kumar Sharma Sharma Date: 2026.10.28 14:16:32 +05'30'