GUNOMAL SANTUMAL ROCHLANI,ULHASNAGAR vs. INCOME TAX OFFICER, WARD 2(1) KALYAN, KALYAN

Per Saktijit Dey, Vice President:

This is an appeal by the assessee against order dated 30.04.2025 passed by National Faceless Appeal Centre (NFAC), Delhi for the Assessment Year (AY)
2015-16. 2. In Ground No.1, the assessee has raised a crucial legal and juri ictional issue challenging the validity of the assessment order dated 26.05.2023 passed under Section (u/s.) 147 r.w.s. 144B of the Income Tax Act, 1961 (in short the ‘Act’).
3. We have heard the parties and perused the materials on record. It is the say of the assessee that the impugned assessment order is barred by limitation as the Assessing Officer (AO) had no power to reopen the assessment u/s. 147 of the Act after expiry of six years from the end of the relevant assessment year i.e. A.Y. 2015-
16. In support of such contention, learned counsel relied upon the following decisions: -
1. Union of India vs. Rajeev Bansal [2024] 167 taxmann.com 70 (SC).
2. Income Tax Officer vs. Warasgaon Lake View Hotels Ltd., ITA No.
2788/Mum/2025 dated 20.06.2025. 3. SKF India Ltd. Vs. DCIT, ITA No. 2518/Mum/2024 dated 16.05.2025. 4. Per contra, learned Departmental Representative (DR) submitted that under the new regime of Section 147 of the Act introduced by Finance Act, 2021 w.e.f.
01.04.2021, the AO has power to reopen the assessment before expiry of 10 years from the end of the relevant assessment year. Thus, he submitted, the notice issued u/s. 148 of the Act is within the period of limitation, hence, the assessment order cannot be held as invalid.
5. We have considered rival submissions and perused materials on record.
Before proceeding to decide the specific issue arising for consideration, it is necessary to bear in mind the following chronological events: -
1. 29.09.2015-return of income filed for Assessment Year 2015-16. 2. 29.07.2022-assessment order passed u/s. 143(3) of the Act.
3. 29.07.2022-notice u/s. 148 issued.
6. Keeping in perspective, the aforesaid chronological events, the issue that needs to be decided is whether, the impugned assessment order passed is barred by limitation. It is the case of the assessee that the notice u/s. 148 of the Act ought to year as assessee’s case is covered under the old regime of Section 147 of the Act hence, six years limitation would apply. Whereas, it is the case of the Department that the AO has power to reopen the assessment before expiry of ten years from the end of the relevant assessment year as per the new regime of Section 147 of the Act.
7. In our view, the issue is no more res integra in view of the ratio laid down by the Hon’ble Supreme Court in case of Union of India vs. Rajeev Bansal (supra).
While dealing with identical issue as is under consideration now before us, the Hon’ble Supreme Court has held as under:-
“18. The present batch of appeals gives rise to the following issues:
a. Whether TOLA and notifications issued under it will also apply to reassessment notices issued after 1 April 2021; and b. Whether the reassessment notices issued under Section 148 of the new regime between July and September 2022 are valid.
C.
Submissions
19. Mr N Venkataraman, learned Additional Solicitor General of India, made the following submissions on behalf of the Revenue:
a. Parliament enacted TOLA as a free-standing legislation to provide relief and relaxation to both the assesses and the Revenue during the time of COVID-19. TOLA seeks to relax actions and proceedings that could not be completed or complied with within the original time limits specified under the Income Tax Act; b. Section 149 of the new regime provides three crucial benefits to the assesses:
(i) the four-year time limit for all situations has been reduced to three years; (ii) the first proviso to Section 149 ensures that re-assessment for previous assessment years cannot be undertaken beyond six years; and (iii) the monetary threshold of Rupees fifty lakhs will apply to the re- assessment for previous assessment years; c. The relaxations provided under Section 3(1) of TOLA apply “notwithstanding anything contained in the specified Act.” Section 3(1), therefore, overrides the Income Tax Act; 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
Year
Within 3 years
Expiry of Limitation read with TOLA for (2)
Within six years
Expiry of Limitation read with TOLA for (4)
(1)
(2)
(3)
(4)
(5)_
2013-2014
31.03.2017
TOLA not applicable
31.03.2020
30.06.2021
2014-2015
31.03.2018
TOLA not applicable
31.03.2021
30.06.2021
2015-2016
31.03.2019
TOLA not applicable
31.03.2022
TOLA not applicable
2016-2017
31.03.2020
30.06.2021
31.03.2023
TOLA not applicable
2017-2018
31.03.2021
30.06.2021
31.03.2024
TOLA not applicable f. The Revenue concedes that for the assessment year 2015-16, all notices issued on or after 1 April 2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA; g. Section 2 of TOLA defines “specified Act” to mean and include the Income Tax
Act. The new regime, which came into effect on 1 April 2021, is now part of the Income Tax Act. Therefore, TOLA continues to apply to the Income Tax
Act even after 1 April 2021; and h. Ashish Agarwal (supra) treated Section 148 notices issued by the Revenue between 1 April 2021 and 30 June 2021 as show-cause notices in terms of Section 148A(b). Thereafter, the Revenue issued notices under Section 148 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).”
8. As could be seen from the aforesaid observations of Hon’ble Supreme Court, learned Additional Solicitor General of India (ASG) appearing for the Revenue had conceded that in so far as Assessment Years (AYs) 2013-14 to 2015-16 are concerned, the period of limitation of six years provided under the old regime would apply and Taxation and Other Laws (Relaxation of Certain Provisions) [Ordinance 2020] (in short ‘TOLA’) would not extend the limitation beyond the period of six years. That being the legal position, the period of limitation for reopening of assessment for A.Y. 2015-16 expired on 31.03.2022. Even, the other decisions of the Coordinate Benches cited by learned counsel for the assessee (Supra) express similar view. In the facts of the present case, admittedly, the notice u/s. 148 of the Act was issued on 29.07.2022 after expiry of six years from the end of the impugned assessment year. That being the case, the proceedings are evidently barred by limitation, hence void ab initio. In view of the aforesaid, we are inclined to quash the impugned assessment order. Consequently, the order passed by learned First Appellate
Authority is set aside.
9. In view of our decision above, the other issues raised by the assessee, having become redundant for the purpose of present appeal, are kept upon.
10. In the result, appeal is allowed as indicated above.

Order pronounced in the open court on 04/09/2025. (PADMAVATHY S) (Saktijit Dey)
Accountant Member Vice President

Mumbai; Dated : 04/09/2025
Aks/-
Copy of the Order forwarded to :

(Dy./Asstt.