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Facts
The assessee's appeal is against an order related to Assessment Year 2015-16. The core issue revolves around the validity of a notice issued under Section 148 of the Income Tax Act, 1961, and the subsequent assessment order. The assessee contends that these were issued beyond the permissible time limits.
Held
The Tribunal followed the decisions of the Hon'ble Supreme Court and Delhi High Court, which held that notices issued after April 1, 2021, for the Assessment Year 2015-16, are liable to be dropped. Consequently, the order under Section 148A(d) and the notice under Section 148 are quashed.
Key Issues
Whether the notice issued under Section 148 and the consequent assessment order for AY 2015-16 are valid, considering they were issued beyond the time limits prescribed under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020.
Sections Cited
250, 148, 148A, 44AB, 149, 151
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Income Tax Appellate Tribunal, PUNE BENCHES “SMC” :: PUNE
ORDER
PER DR. DIPAK P. RIPOTE, AM:
This appeal filed by Assessee is against the order of ld.Commissioner of Income Tax(Appeal)[NFAC], passed under section 250 of the Income Tax Act, 1961 for the A.Y.2015-16 dated 24.03.2025. The Assessee has raised the following grounds of appeal :
1. On the fact and circumstances of the case and in law, the assessment order passed by the AO being barred by limitation, the same is invalid and hence needs to be quashed.
On the facts and circumstances of the case and in law, the notice under section 148 being without DIN, the same is invalid and hence the consequent assessment order passed by the AO is also invalid.
3. On the fact, circumstances of the case and in law, the CIT(A) erred in confirming the addition made by the AO, representing the difference between AO's estimation of income at 8% of the turnover and the income declared by the appellant in her return of income, in spite of the fact that: a. The appellant has maintained proper books of account, got them audited u/s 44AB and had submitted all the details during the assessment proceeding, it was incorrect on the part of the AO to estimate income at 8%. b. The assessment of the appellant for AY 2018-19 and A Y 2019-20 are completed, on the same set of facts, accepting the book results without any additions thereto by the same NaFAC. The appellant craves leave to add to, amend, alter, modify, delete or add a new ground of appeal
before or at the time of hearing.” Submission of ld.AR :
2. The ld.Authorised Representative(ld.AR) for the Assessee argued only on the legal grounds. The ld.AR submitted that the order u/s.148A(d) and subsequent notice u/s.148 of the Act, are bad in law as they have been issued beyond the time permitted by the Act.
2.2 Ld.AR submitted that the notice u/s.148 is bad in law. Ld.AR relied on the order of Hon’ble Delhi High Court in the case of Pratishta Garg Vs. ACIT WP(C) 16878/2024 vide order dated 19.12.2024. [A] 2.3 The ld.AR also relied on the decision of Hon’ble Supreme Court in the case of Union of India Vs. Rajiv Bansal – 469 ITR 46. Ld.AR invited our attention to the submission Additional Solicitor General(ASG) which is at para 19 of the said order.
Submission of ld.Departmental Representative(ld.DR) : 3. The ld.DR for the Revenue relied on the order of the Assessing Officer and ld.CIT(A).
Findings &Analysis : 4. We have heard both the parties and perused the records. In this case, notice u/s.148 was issued on 30.06.2021 for A.Y.2015-16. Copy of the said notice has been submitted by the assessee at page no.2 of the paper book. Order U/s.148A(d) is dt.21/07/2022 & notice u/s 148 is dt.22/07/2022. 4.1 Before the Hon’ble Supreme Court in the case of UoI Vs. Rajeev Bansal 469 ITR 46(SC), Mr.N.Venkataraman, learned Additional Solicitor General of India, made the following submissions on behalf of the Revenue: Quote, “a. Parliament enacted TOLA as a free-standing legislation to provide relief and relaxation to both the assesses and the Revenue during TOLA seeks to relax actions and proceedings that [A] 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 sic years; and (iii) the monetary threshold of Rupees fifty lakhs will apply to the re assessment for previous assessment years; 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;” Unquote. 4.2 Thus, the Ld.Additional Solicitor General of India submitted before the Hon’ble Supreme Court that for A.Y.2015-16 all the notices issued after 01/4/2021 will have to be dropped.
4.3 In the case under consideration, we have already mentioned that the initial notice u/s.148 was issued 30.06.2021, which is after 01/04/2021. Thus, as submitted by Ld.ASG the proceedings initiated for A.Y.2015-16 after 01/04/2021 needs to be dropped. However, in this case the AO has not dropped the proceedings initiated after 01/04/2021 for A.Y.2015-16, which should have been dropped as submitted by Ld.ASG.
The Hon’ble Supreme Court in the decision of Deepak Steel and Power Limited Vs. CBDT [2025] 174 taxmann.com 144 (SC) vide order dated 2nd April, 2025 has held as under : “5. As the revenue made a concession in the aforesaid decision that is for the assessment year 2015-2016, allnotices issued on or after 1st April, 2021 will have to be dropped as they would not fall for completion duringthe period prescribed under the taxation and other laws (Relaxation and Amendment of certain ProvisionsAct, 2020). Nothing further is required to be adjudicated in this matter as the notices so far as the presentlitigation is concerned is dated 25.6.2021.”
6. The Hon’ble Delhi High Court had considered this issue in the case of Pratishta Garg Vs. ACIT WP(C) 16878/2024 order dated 19/12/2024. The relevant paragraphs of the order of the Hon’ble Delhi High Court is reproduced here as under : Quote, “1. The petitioner has filed the present petition, inter alia, praying asunder: "A. Issue a writ in the nature of Certiorari to quash the impugned notice dated 22.06.2021 issued under section 148 of the Act, and the consequential notice 25.05.2022 issued under section 148A(b) of the Act; the impugned order dated 19.07.2022 passed under section 148A(d) of the Act and the impugned notice dated 19.07.2022 issued under section 148 of the Act in the case of the petitioner for AY 2015- 16; D. Issue any other Writ, order, or Direction which this Hon'ble Court may deem fit and proper in the facts and circumstances of the case, and E. To allow the writ petition with cost in favor of the Petitioner and against the Respondent."
2. Learned counsel for the Revenue fairly states that the prayers made by the petitioner are required to be allowed as the same are covered by the concession made by the Revenue before the Supreme Court in Union of India and Others vs. Rajeev Bansal: 2024 SCC OnLine SC 2693, 2024 INSC 754, as recorded in paragraph 19 (f) of the said decision. He also submits that the Coordinate Bench of this Court had, after noting the aforesaid concession, allowed a similar petition Ibibo Group Pvt. Ltd. vs. Assistant Commissioner of Income Tax Circle: W.P.(C) 17639/2022 by order dated 13.12.2024.
It is relevant to note paragraph 19 (e) and (f) of the decision of the Supreme Court in Union of India and Others vs. Rajeev Bansal, 2024 SCC OnLine SC 2693. The same are set out as under:
"(e) The Finance Act, 2021 (2021) ((2021) 432 ITR (Stat) 52) substituted the fold regime for reassessment with a new regime. The first provisio 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 (Relxation 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 :
Assessment Within Years Expiry of Within Six Expiry of Year Limitation Years Limitation read with read with TOLS for (4) TOLA for (2) (3) (4) (5) 2013-2014 31.03.2017 TOLA not 31.03.2020 30.06.2021 applicable; 2014-2015 31.03.2018 TOLA not 31.03.2021 30.06.2021 applicable. 2015-2016 31.03.2019 TOLA not 31.03.2022 TOLA not applicable; applicable.
2016-2017 31.03.2020 TOLA not 31.03.2023 TOLA not applicable. applicable. 2017-2018 31.03.2021 TOLA not 31.03.2024 TOLA not applicable. 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."
In view of the aforesaid, the impugned order dated 19.07.2022 issued under Section 148(A)(d) of the Income Tax Act, 1961 (hereafter the Act) as well as the notice dated 19.07.2022 issued under Section 148 of the Act in respect of AY 2015-16 are liable to be set aside. It is so directed.
5. The petition is allowed in the aforesaid terms.
Pending application also stands disposed of.”,Unquote.
6.1 Similarly, Hon’ble Delhi High Court in the case of Neera Gupta Vs. ITO WP(C) 17352/2024 vide order dated 17/12/2024 allowed the petition of the assessee.
The facts of the Pratishta Garg case(supra) and Neera Gupta Case (supra) are identical to the assessee under consideration. In the case of the Pratishtha Garg the Order u/s.148A(d) was passed on 19/07/2022 and notice u/s.148 was issued on 19/07/2022 for A.Y.2015-16. In the case of the Assessee i.e.Heena Irfan Bepari also the order u/s.148A(d) was passed on 21.07.2022(page no.9 to 17 of the paper book) and notice u/s.148 was issued on 22.07.2022(page no.18 of the paper book) for A.Y.2015-16. Similarly, the facts of the case Deepak Steel and Power Limited(supra) are identical to the facts of the present assessee’s case.
No decision of Hon’ble Jurisdictional High Court has been brought to our notice.
8.1 Therefore, respectfully following the decisions of Hon’ble Supreme Court(supra), Hon’ble Delhi High Court(supra) and the submission made by Ld.Additional Solicitor General before Hon’ble Supreme Court, the Order u/s.148A(d) and the notice u/s.148 are quashed.
Since we have allowed the Legal Ground, we do not intend to adjudicate other grounds raised by the Assessee. Accordingly, Ground Nos.2, 3a and 3b are dismissed as unadjudicated.