HILTON DEALMARK PRIVATE LIMITED,KOLKATA, WEST BENGAL vs. CIRCLE 7(1), KOLKATA, AAYKAR BHAVAN, KOLKATA
PER SANJAY AWASTHI, ACCOUNTANT MEMBER: 1. This appeal arises from order u/s 250 of the Income Tax Act, 1961 (hereafter “the Act”) dated 06.03.2025, passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereafter “the Ld. CIT(A)”]. 1.1 In this case, the Ld. AO has passed an exparte order through which an amount of Rs. 5,60,000/- has been added by assuming a commission of 2% on alleged accommodation entries worth Rs. 2,80,00,000/-. The assessee carried this matter in appeal where he could not succeed mainly on the ground that there was inadequate presentation of facts at first appeal stage.
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2 Further aggrieved, the assessee has approached the ITAT. On the last date of hearing, the Ld. AR pointed out that the assessee had requested that an additional ground of appeal should be admitted since it went to the root of the matter. The additional ground of appeal is as under: “The notice u/s. 148 issued on 27/07/2022 is clearly barred by limitation. The reason being the test for checking the time limit and the validity of notices issued u/s. 148 under new regime applicable from A.Y. 2021-22 and prior regime is, whether period of six years had expired at the time of issue of such notice or not. In the case of assessee, the period of six years had expired on 31/03/2022 and consequently, the notice dated 27/07/2022 is clearly barred by limitation and on this ground, the assessment proceedings u/s. 147 is hereby quashed.” 2. Before us, the Ld. AR submitted that the notice u/s 148 of the Act issued under the new regime was dated 27.07.2022 and was clearly time barred since a valid notice could have been issued again only by 31.03.2022. The Ld. AR relied on a Coordinate Bench decision in the case of Solo Hotels India Pvt. Ltd., ITA No. 2540/Kol/2024, dated 22.07.2025. The Ld. AR pointed out the relevant findings therein as under: “5. Upon hearing the submission of the respective parties, and on perusal of records following the facts have been emerged: Date of Issuance of Notice Notice u/s 20.06.2021 148 (Under Old Provision) 30.05.2022 148A(b) 29.07.2022 148A(d) 29.07.2022 148 (Under New provision) 28.05.2023 Order passed u/s 147 r.w.s. 144B
At the outset, it has been stated that ld. Counsel for the assessee stated that the entire re- assessment proceedings and notice u/s.148 dated 27/07/2023 is barred by limitation, in view of the judgment of the Hon’ble Supreme Court in the case of Union of India vs. Rajeev Bansal reported in (2024) 167 taxmann.com 17; and judgment of the Hon’ble Delhi High Court in the case of Ibibo Group Pvt. Ltd. vs. ACIT in WP(C) No.17639 / 2022 judgment and order dated 13/12/2024. 5. The brief facts qua the legal issue are that assessee is a partnership firm has filed its return of income for A.Y.2015-16 on 28/08/2015 declaring total income of Rs.12,99,47,790/-. 6. Before us following sequence of events have been given with regard to issuance of notice u/s.148 and various letters issued and filed before the issuance of final notice u/s.148 dated 27/02/2022. Particulars AY: 2015-16
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Notice u/s 148 as per old regime (deemed to be show cause notice u/s 148A(b) of the Act.)
29/06/2021
Issue Letter/deemed notice u/s 148A(b) providing relevant material and information to the assessee.
26/05/2022
Issue Letter issued u/s 148A(b) providing additional information.
01/06/2022
Response filed by assessee to the above issue letter.
30/06/2022
Order u/s 148A(d) and notice u/s 148 (under new law)
27/07/2022
At the outset, it has been submitted that as per the Revenue’s admission before the Hon’ble Supreme Court in the case of Rajeev Bansal, A.Y.2015-16 does not fall during the period prescribed under TOLA. The time limit for issuance of notice u/s.148 for A.Y.2015-16 expires on 31/03/2022. The Hon’ble Supreme Court clearly held that TOLA will apply to the Income Tax Act after 01/04/2021 if any action or proceeding specified under substituted provisions of the Income Tax Act falls for completion between 20/03/2020 and 31/03/2021. For the A.Y.2015-16, the time limit for issuance of notice u/s.148 was 31/03/2022 and therefore, it was qua this time limit, the Revenue had conceded before the Hon’ble Supreme Court that TOLA will not apply for the A.Y.2015-16. For the sake of ready reference para 19 of the said judgment of the Hon’ble Supreme Court reads as under:- 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: (1) 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 time limits for issuing a notice under section 148 read with Section 149 of 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 reassessment 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, 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 TOLA for (2)
Within six
Years
Expiry of Limitation read with TOLA for (4)
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(1)
(2)
(3)
(4)
(5)
2013-14
31-03-2017
TOLA not applicable 31-03-2020
30-06-
2021
2014-15
31-03-2018
TOLA not applicable 31-03-2021
30-06-
2021
2015-16
31-03-2019
TOLA not applicable 31-03-2022
TOLA not applicable
2016-17
31-03-2020
30-6-2021
31-03-2023
TOLA not applicable
2017-18
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 T a x 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 showcause notices in terms of Section 148A(b).
Thereafter, the Revenue issued notices under section 148 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. This stand of the department and concession given by the Revenue before the Hon’ble
Supreme Court has been dealt by the Hon’ble Delhi High Court in the case of Ibibo Group Pvt
Ltd.(supra). The relevant observation of the Hon’ble High Court reads as under:-
“1. The instant writ petition assails the reassessment action initiated under Section 148 of the Income Tax Act, 1961 ["Act"] for Assessment Year ["AY"] 2015-2016. The petitioner has impugned the order referable to Section 148A(d) of the Act dated 23 July 2022 and the consequential notice under Section 148 of the Act which came to be issued on the same date.
2. We bear in mind the following concession which came to be recorded on behalf of the respondent before the Supreme Court in Union of India and Others vs. Rajeev Bansal [2024
SCC OnLine SC 2693] and relevant parts whereof are reproduced hereinbelow:-
"(e) The Finance Act, 2021 ((2021) 432 ITR (Stat) 52) substituted the old regime for reassessment with a new regime. The first proviso to section 149 does not expressly bar the application of Taxation and other Laws (Relaxation and Amendment of Certain
Provisions) Act, 2020. Section 3 of the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 applies to the entire Income-tax Act, including sections 149 and 151 of the new regime. Once the first proviso to section 149(1)(b) is read with Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act,
2020, then all the notices issued between April 1, 2021 and June 30, 2021 pertaining to the 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:
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Hilton Dealmark Pvt. Ltd.
Assessment
Year
Within 3 Years
Expiry of Limitation read TOLA for (2)
Within six
Years
Expiry of Limitation read with TOLA for (4)
(1)
(2)
(3)
(4)
(5)
2013-14
31-03-2017
TOLA not applicable
31-03-2020
30-06-2021
2014-15
31-03-2018
TOLA not applicable
31-03-2021
30-06-2021
2015-16
31-03-2019
TOLA not applicable
31-03-2022
TOLA not applicable
2016-17
31-03-2020
30-6-2021
31-03-2023
TOLA not applicable
2017-18
31-03-2021
30-06-
2021
31-03-2024
TOLA not applicable
(f) The Revenue concedes that for the assessment year 2015- 2016. all notices issued on or after April 1, 2021 will have to be dropped as they will not fall for completion during the period prescribed under the Taxation and other Laws (Relaxation and Amendment of Certain
Provisions) Act, 2020."
3. In view of the aforesaid, it is evident that the impugned reassessment action for AY 2015-16
would not sustain. 4.The writ petition is accordingly allowed. The impugned order under Section 148A(d) of the Act dated 23 July 2022 and consequential notice referable to Section 148 of even date are hereby quashed and set aside.”
9. Thus, the notice u/s.148 issued on 27/07/2022 is clearly barred by limitation. The reason being the test for checking the time limit and the validity of notices issued u/s.148 under new regime applicable from A.Y. 2021-22 and prior regime is, whether period of six years had expired at the time of issue of such notice or not. In the case of assessee, the period of six years had expired on 31/03/2022 and consequently, the notice dated 27/07/2022 is clearly barred by limitation and on this ground, the assessment proceedings u/s.147 is hereby quashed.
Accordingly, the cross objection filed by the assessee is allowed and all the grounds raised by the Revenue are dismissed as infructuous.
10. In the result, appeal filed by the Revenue is dismissed as infructuous and Cross Objection of the assessee is allowed.
6. In the present case, it admits of no doubt that notice u/s 148 of the Act was issued on 29.07.2022 being clearly barred by limitation. In the case of the assessee the period of 6 years has expired on 31.03.2022 hence, the notice dated 29.07.2022 is clearly barred by limitation.
The assessment proceedings u/s 147 of the Act is hereby quashed.”
2.1
The Ld. DR relied on the orders of authorities below.
3. We have carefully considered the documents before us and have gone through the facts of the case. It is seen that indeed the notice u/s 148 of the Act ahs been issued on 27.07.2022, as his evidenced by a copy of the notice filed along with the additional ground of appeal. Considering the 6
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totality of facts and circumstances and also relying on the order in the case of Solo Hotels India Pvt. Ltd. (supra) it is held that the notice u/s 148
of the Act was issued beyond permissible time limit and hence the subsequent proceedings deserve to be treated as void.
4. In result, appeal of the assessee is allowed.
Order pronounced on 21.11.2025 (George Mathan) (Sanjay Awasthi)
Judicial Member Accountant Member
Dated: 21.11.2025
AK, Sr. P.S.
Copy of the order forwarded to:
1. Appellant
2. Respondent
3. Pr. CIT
4. CIT(A)
CIT(DR)
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By order