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Facts
The assessee's original return for AY 2013-14 was filed late. A reassessment notice under Section 148 of the Income Tax Act was issued on 30.06.2021, leading to an addition for long-term capital gains. The reassessment proceedings, completed on 24.05.2023, followed the procedures laid down by the Supreme Court in the Ashish Agarwal case, treating the Section 148 notice as a Section 148A(b) show cause notice and subsequent issuance of a Section 148 notice on 28.07.2022.
Held
The Tribunal, relying on the Supreme Court's judgment in Rajeev Bansal and the jurisdictional Madras High Court, held that the reassessment notice issued under Section 148 of the New Regime on 28.07.2022 for AY 2013-14 was time-barred as it was issued beyond the specified 'surviving period'. Therefore, the re-assessment order passed pursuant to this notice was set aside.
Key Issues
Whether the reassessment notice issued under Section 148 of the Income Tax Act on 28.07.2022 for AY 2013-14 was time-barred, considering the extended timelines under TOLA, 2020 and the judgments of the Supreme Court in Ashish Agarwal and Rajeev Bansal regarding the 'surviving period' for such notices.
Sections Cited
250, 148, 143(3), 147, 151, 148A(b), 148A(d), 148A(c), 149(1)
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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: SHRI GEORGE GEORGE KAND SHRI S.R. RAGHUNATHA
आदेश /O R D E R
PER GEORGE GEORGE K, VICE PRESIDENT:
This appeal filed at the instance of the assessee is directed against the order of Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi dated 04.09.2024 passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Year is 2013-14.
Brief facts of the case are as follows: The assessee is an individual. For the assessment year 2013-14, the return of income was filed on 26.03.2024 declaring total income of Rs.14,19,860/-. Subsequently, a notice u/s.148 of the Act was issued on 30.06.2021 as per the old regime within the extended time limit in view of Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 (TOLA). The reason for issuing notice u/s.148 of the Act was that assessee along with seven co-owners had sold an immovable property during the relevant assessment year, which suggested escapement of income. Later on, as per CBDT's instruction No. 1/2022 of F.No.279 /Misc. /M-51/2022-ITJ dated 11th May 2022 on Implementation of judgment of Hon'ble Supreme Court dated 04.05.2022 in the case of Union of India Vs. Ashish Agarwal reported in 441 ITR 1, adjudicated on the validity of issue of reassessment notice issued during the period from 01.04.2021 to 30.06.2021 within the time extended by TOLA, 2020, the information and material relied upon for issuance of extended reassessment notice dated 30.06.2021 was communicated to the assessee vide 02.06.2022. In response to the said communication issued on 02.06.2022 in accordance with directions issued by CBDT in implementation of judgment of Hon’ble Supreme Court, the assessee submitted response on 11.06.2022 which was duly considered while passing order u/s 148A(d) dated 28.07.2022 followed by issue of notice u/s 148 dated 28.07.2022 with prior approval of the competent authority. The assessment proceeding for the AY 2013-14 was completed u/s 143(3) r.w.s 147 of the Act on 24.05.2023 wherein addition of Rs. 97,09,569/- was made on account of long term capital gains which the assessee failed to offer in ITR filed for the AY 2013-14.
Aggrieved by the said assessment order the assessee filed appeal before the First Appellate Authority (FAA) raising several grounds of appeal. The FAA after considering all the aspects (factual and legal) of the case, partly allowed the appeal of the assessee subject to verification by the AO on certain aspects before allowing such reliefs.
4. Aggrieved by the order of the FAA dated 04.09.2024, the assessee filed appeal before the Tribunal. The assessee, vide additional submissions dated 18.03.2025 and 24.04.2025 questioned
The Ld.AR submitted that notice u/s.148 of the Act dated 28.07.2022 is time barred and liable to be set aside as the said notice is beyond “surviving period” as specified in para 114(g) and 114(h) in the judgment of the Hon’ble Apex Court in the case of Rajeev Bansal, supra.
The Ld.DR submitted that the notice u/s.148 of the Act as per the old regime read with TOLA 2022 was issued on 30.06.2021. The AO considering the Hon’ble Apex Court Judgment in the case of Union of India vs. Ashish Agarwal reported in 441 ITR 1 and the CBDT Instruction No.1/2022 dated 11.05.2022 had followed the procedure laid down by the Hon’ble Apex Court. Hence, the notice issued is not barred by limitation.
We have heard rival submissions and perused the material on record. The Finance Act, 2021 revamped the entire scheme of re- assessment procedure u/s 147 to 151, w.e.f 01.04.2021. Thus, the old regime of re-assessment ended on 31.03.2021 and the new 01.04.2021. Due to COVID-19, the Government introduced the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 (TOLA), extending time limits. Accordingly, the time available for the Department to issue notice u/s 148 of the Act under Old Regime, falling during the period from 20.03.2020 till 31.03.2021, were extended till 30.06.2021. The starting point of these entire chain of litigation was that, since the Old regime of re-assessment had ended on 31.03.2021, was it valid to issue notice based on an ended regime during the extended period of 01.04.2021 to 30.06.2021. Further, to issue notice under New Regime, required a notice u/s 148A(b) and an order passed u/s 148A(d).
The Hon’ble Supreme Court resolved this issue in the case of UOI & Ors Vs Ashish Agarwal reported in 444 ITR 1, by exercising powers under Article 142 of the Constitution of India. The Hon’ble Supreme court in Para-10(i) held that the notice u/s 148 of the Act issued under Old Regime between the period of 01.04.2021 to 30.06.2021, shall be deemed to be a show cause notice u/s 148A(b) of the New Regime and that the AO shall provide information and materials relied upon by revenue within 30 days of the judgment, so that assessee can reply within two weeks thereafter. Accordingly, the Hon’ble Supreme Court in the case of Ashish Agarwal (supra) and went ahead with procedures culminating in assessment.
These assessments triggered a second round of litigation, primarily on the fact that, if the re-assessment notices issued u/s 148 of the New Regime were valid or not. In the Second round, the Hon’ble Supreme Court in the case of UOI & Ors Vs Rajeev Bansal, reported in 469 ITR 46, held that after exclusion of limitations, the notices u/s 148 of New Regime should be issued within the “SURVING PERIOD” and anything issued beyond surviving period is time barred and liable to be set-aside.
The Submission made before us is that the notice issued u/s 148 of the Act dated 28.07.2022, for AY-2013-14, in the case of the assessee is time barred as it was issued beyond the surviving period as specified in the case of Rajeev Bansal (supra). The relevant dates in the case of assessee are as follows:- Serial Particulars Date 1) Date of issue of Notice u/s 148 of OLD regime during 30.06.2021 the period 01.04.2021 to 30.06.2021 2) Date of supply of information as per judgment of Asish 02.06.2022 Agarwal 3) Date of reply filed by the Assessee for the above 11.06.2022
The manner of computation of surviving period and limitation, as provided in case of Rajeev Bansal (supra), are as follows: 1st. Surviving period is calculated by computing the number of days between the date of issuance of the deemed notice and 30th June, 2021 (Para-108)
2nd. The surviving period starts ticking from the date of receipt of response by AO (Para-111 & 112)
3rd. The AO has to consider response of the Assessee u/s 148A(c), pass order u/s 148A(d) and issue notice u/s 148 of New regime, all these procedures has to happen within the surviving period (Para-111)
4th. Only notices issued within the surviving period calculated from the date of receipt of response by AO is valid. The notices issued beyond surviving period is time barred and liable to be set-aside (Para-113 and 114(g) & 114(h))
Applying the above principles laid down by the Hon’ble Supreme Court to the facts of the instant case and adopting a conservative computation, notice issued u/s.148 of the Act will time barred by 35 days as detailed below (The judgment of Hon’ble Apex Court in the case of Rajeev Bansal, supra does not specify the application of fourth proviso of section 149(1), which governs time limit for notice u/s.148 of the Act. Still in the below computation, we have taken the outer limit of 7 days extension) Serial PARTICULARS COMPUTATION DATES 1 Date of issue of Original Notice u/s 148 within A 30-06-2021 TOLA Period 2 Last date of TOLA B 30-06-2021 3 Balance (On Inclusive method) C = B -A 1 4 Minimum days available as per 4th Proviso of D 7 Section 149(1) 5 Then SURVIVING PERIOD (Para-108 to 113 E (Higher of C & 7 of Rajeev Bansal) D) 6 Date of response filed by Appellant to 148A(b) F 11-06-2022 notice 7 Date on which Period of two weeks allowed to G 16-06-2022 assessee to respond to notice ends (deemed stay as per 3rd proviso to section 149 and Para 114 (g) of Rajeev Bansal) 8 Last date for issuing notice u/s 148 [i.e., H = E + G 23-06-2022 16.06.2022+ 7 days] 9 Actual date of issuance of notice u/s 148 H 28-07-2022 10 Then Notice is time Barred by (Para 114 (H) I = H - G 35 of Rajeev Bansal)
The judicial precedents upholding the above proposition are as follows:- i. Judgment of Jurisdictional Madras High Court in Mrs.Thulasidass Prabavathi Vs ITO [W.P.No.19010 of 2022] (Para-16 & 17) ii. Judgment in ACIT Vs Amit Jain SLP (Supreme Court) (Civil) Diary No.32211/2024 (303 taxman 163) (Para-2 to 4) iii. Judgment of KULWANT SINGH & ORS. vs. UNION OF INDIA & ORS (341 CTR (P&H) 700) (Para-6 & 8) iv. Judgment of Delhi High Court in RAM BALRAM BUILDHOME PVT. LTD Vs ITO & Ors [W.P.(C) 16232/2024] (reported in (2025) 9 NYPCTR 157 (Delhi) ) (Para-65 to 73) v. Judgment of Delhi High Court in KANWALJEET KAUR & ORS Vs ACIT Delhi[W.P.(C) 3908/2023] (Para-24 & 28) vi. Order of ITAT Raipur in M/s. Kachrulal Jitendra Kumar Vs The ITO [ITA No.307/RPR/2024] (Para-23 to 25) vii. Order of ITAT Raipur in DCIT VS Shri Vinay Agrawal [ITA No: 29 & 30/RPR/2025] (Para-19 & 20) viii. Order of ITAT Mumbai in ACIT Vs Ramchand Thakurdas Jhamtani [ITA No. 3553/MUM/2024] (Para-9 & 10) ix. Order of ITAT Mumbai in ITO Vs Sumitra Rajeshbhai Jain [ITA No. 3553/MUM/2024] (Para-22 & 23) x. Order of ITAT Mumbai in Nilanjana Arvinder Singh Vs DCIT [ITA No.6140/MUM/2024] (Para-30 & 31) xi. Order of ITAT Mumbai, in DCIT Vs Larsen & Toubro Ltd in ITA No-5743 & 5745 of 2024, reported in 173 taxmann.com 582 (para-10.2) xii. Order of ITAT Pune in DCIT VS Kolte Patil [ITA Nos. 2011 & 2023/Pune/2024; Asst. yrs. 2014-15 & 2016-17], reported in (2025) 235 TTJ (Pune) 113 : (2025) 39 NYPTTJ 552 (Pune) (Para-45)
The above judicial precedents have categorically upheld the above proposition and has held the notice to be time barred if they are beyond surviving period. We notice that ITAT Pune SMC Bench, in the case of Pushpadevi Shivlal Rathi Vs ITO in for AY-2014-15, had held against the assessee. However, subsequently co-ordinate Bench of ITAT Pune in the case of DCIT VS Kolte Patil reported in (2025) 235 TTJ (Pune) 113 had decided the issue in favour of assessee.
Report of AO dated 09.06.2025 before us confirms the relevant dates and AO has not contradicted the ratio laid down in case Rajeev Bansal, supra. The AO has only stressed that the 148A(d) order and the notice u/s 148 of new regime, both dated 28.07.2022, were within the period, as specified in 148A(d), of one month from the end of the month in which reply is received. However, this issue has been elaborately dealt with by Hon’ble Supreme Court in the case of Rajeev Bansal (Supra) and also by other judicial forums. The Hon’ble Delhi High Court at Para-71 in the case of Ram Balram Buildhome (Supra), has held that the time available u/s 148A(d) was “necessarily truncated” and the same was required to be passed within the surviving period.
Further, Hon’ble jurisdictional Madras High Court in the case of Mrs.Thulasidass Prabavathi (Supra) has held the notice u/s 148 issued beyond surviving period to be time barred. In Para-4 & 5 of the judgment, clearly specify the dates and events. In that case, the notice u/s 148 of old regime was on 21.06.2021, the reply was filed by assessee on 31.05.2022 and the order u/s 148A(d) / 148 Notice was issued on 30.06.2022. Even though as per 148A(d), the AO had time of one month from the end of the month to pass the order (In this case such time happens to be 30.06.2022), the same was truncated to the extent of surviving period and the notice was held to
In view of the above judgment of Hon’ble Supreme Court and Hon’ble Jurisdictional Madras High Court, we hold that the notice dated 28.07.2022 issued u/s 148 of the New Regime in respect of assessment year 2013-14 is time barred and re-assessment order pursuant to the same is set-aside.
In the result, the appeal filed by the assessee is allowed.
Order pronounced in the open court on 3rd July, 2025 at Chennai.