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Income Tax Appellate Tribunal, “B” BENCH”, KOLKATA
Assessment Year 2015-16 Solo Hotels India Private Limited, 16th Floor, Biowonder At Premises No. 789, Anandapur, E.M. Bye Pass, West Bengal - 700107 [PAN: AAPCS8294Q] ……..…...…………….... Appellant vs. Circle 11(1), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata - 700069 ................................. Respondent Appearances by: Assessee represented by : Anil Kochar, Advocate Department represented by : Altaf Hussain, Addl. CIT, Sr. DR Date of concluding the hearing : 15.07.2025 Date of pronouncing the order : 22.07.2025 O R D E R
PER PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER
1. This appeal arises from the order u/s 250 of the Income Tax Act, 1961 (hereafter “the Act”), dated 10.10.2024, passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereafter “the Ld. CIT(A)”].
The brief facts of the case of the assessee is that assessee being a company filed its return of income for the Assessment Year (AY) 2015-16 declaring total loss to the tune of Rs. 3,46,76,171/-. The case of the assessee was reopened u/s 147 of the Act and notice u/s 148 of the Act was issued on 29.07.2022. The assessee filed return of income in response to the said notice. A notice u/s 142(1) of the Act was also issued calling for the requisite details. Details filed by the assessee have been carefully Solo Hotels India Private Limited perused by the AO and assessment order was passed determining assessable income at Rs. 1,05,24,080/-. Aggrieved by the said order, the assessee prefer appeal before the Ld. CIT(A), wherein appeal of the assessee has been dismissed as there was non-compliance on behalf of the assessee. Being aggrieved by and dissatisfied the assessee preferred appeal before us.
The Ld. AR during the course of hearing of the appeal apart from several grounds taken in the appeal took following two legal grounds by way of additional grounds which are as follows:
For that in the facts and circumstances of the case and in law, the Notice issued u/s 148 of the Income Tax Act, 1961 is time barred as per provision of Sec. 149 of the Act as confirmed by the Hon’ble Supreme Court in the case of Union of India Vs. Rajeev Bansal 167 taxmann.com 70 (SC).
2. For that the Notice issued u/s 148 of the Act on 29.07.2022 is bad in law as the same could not have been issued after 31.03.2022 since TOLA was not applicable.” The Ld. AR has stated that entire reassessment proceedings and notice issued u/s 148 of the Act is barred by limitation in view of the judgment of the Hon’ble Apex Court passed in the case of Union of India Vs. Rajiv Bansal reported in [2024] 167 taxmann.com 17. The Ld. AR cited the decisions of ITAT passed in “C” Bench, Mumbai and also cited a decision of passed in “C” Bench of ITAT Kolkata.
Contrary to that the Ld. DR supports the impugned order.
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 U/s Notice 26.06.2021 148 (Under Old Provision) 30.05.2022 148A(b) 29.07.2022 148A(d) 29.07.2022 148 (Under New Provision)
We have also gone through the order passed by coordinate Bench Mumbai passed in ITA5812/M?2024 in which this issue has been elaborately discussed and the relevant portion of the aforesaid order is reproduced herein as under:
“4. 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.
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/-.
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 Notice u/s 148 as per old regime (deemed 29/06/2021 to be show cause notice u/s 148A(b) of the Act.) Issue Letter/deemed notice u/s 148A(b) 26/05/2022 providing relevant material and information to the assessee. Issue Letter issued u/s 148A(b) providing 01/06/2022 additional information. Response filed by assessee to the above 30/06/2022 issue letter. Order u/s 148A(d) and notice u/s 148 27/07/2022 (under new law)
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 Solo Hotels India Private Limited 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 Within 3 Expiry of Within Expiry of Year Years Limitation six Limitation read TOLA Years read with for (2) TOLA for (4) (1) (2) (3) (4) (5) 2013-14 31-03-2017 TOLA not 31-03-2020 30-06- applicable 2021 2014-15 31-03-2018 TOLA not 31-03-2021 30-06- applicable 2021 2015-16 31-03-2019 TOLA not 31-03-2022 TOLA not applicable applicable 2016-17 31-03-2020 30-6-2021 31-03-2023 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).
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:
(1) (2) (3) (4) (5) 2013-14 31-03-2017 TOLA not 31-03-2020 30-06-2021 applicable 2014-15 31-03-2018 TOLA not 31-03-2021 30-06-2021 applicable TOLA not TOLA not 2015-16 31-03-2019 31-03-2022 applicable 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.”
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, In result, the appeal of the assessee is hereby allowed on the legal ground and the assessment proceedings is hereby quashed.
7. In result, appeal filed by the assessee is allowed.
Order pronounced on 22.07.2025