PRAMOD LAKRA, DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 11(1), KOLKATA, KOLKATA vs. M/S. DALMIA IMPEX PRIVATE LIMITED , KOLKATA

Brief facts of the case are that the assessee-company filed its return of income for the assessment year 2014–15 declaring a total income of ₹1,57,07,120, which was subsequently revised to ₹ 1,52,74,460/-. The case was selected for scrutiny and an assessment was framed under section 143(3) of the Act determining total income at ₹1,53,83,680. Subsequently, based on information received from the Directorate of Investigation, Mumbai under “Project Falcon,” it was noted that the assessee had entered into transactions with M/s Gee Bee Securities Pvt. Ltd. and booked a loss of ₹1,36,14,400/-. The said entity was identified as a paper company controlled by one Shri Pankaj Agarwal, a known entry operator. The Assessing Officer, being unsatisfied with the explanation of the assessee, treated the loss as bogus and further made an addition of ₹2,72,288 on account of alleged commission expenditure for obtaining accommodation entries.

On appeal, the Ld. CIT(A) deleted the additions, granting full relief to the assessee. Aggrieved, the Revenue has preferred the present appeal. The assessee, in turn, filed a Cross Objection challenging the very validity of the reassessment proceedings on legal grounds, contending that the notice issued under section 148 and the subsequent proceedings are barred by limitation and bad in law.

This view finds support from the decisions of various High Courts, including the Hon’ble Delhi High Court in ADM Agro Industries Latur & Vizag Pvt. Ltd. (2025) and Ram Balaram Build Home Pvt. Ltd. [(2024) 171 taxmann.com 99 (Del)], as well as the coordinate benches of the Tribunal in G.D. Mother Educational Society v. ITO [ITA Nos. 309–312/Pat/2023, order dated 20.11.2024]. These authorities have consistently held that any notice issued under the new regime beyond the extended limitation period calculated in line with Rajesh Bansal (supra) is invalid and without jurisdiction.

The assessee’s cross objection raises a pure legal ground challenging the validity of the notice issued under section 148 read with section 148A of the Act, which goes to the root of the matter. As such, the legal issue deserves to be adjudicated first before going into the merits of the additions.

We after hearing the rival submission of parties and respectfully following the ratio laid down by the Hon’ble Supreme Court in Rajesh Bansal (supra) and the consistent view of various High Courts and coordinate benches, we hold that the notice under section 148 A(d) issued on 29.07.2022 is time-barred and therefore, invalid in law. Consequently, the reassessment proceedings initiated and completed pursuant to such notice are void ab initio. Since the reassessment itself is held to be invalid, the additions made therein have no legal basis to survive. Accordingly, the Cross Objection filed by the assessee is allowed and the appeal filed by the Revenue is dismissed as infructuous.