Loading judgment…
Facts
The assessee filed a return for AY 2015-16 declaring Rs. 18.18 lakhs. Reassessment proceedings under Section 147 were initiated on 30/05/2023, based on a notice under Section 148 issued on 05/04/2021, computing income at Rs. 72.84 lakhs. The Ld. CIT(A) dismissed the assessee's appeal against this reassessment, leading to the present appeal.
Held
The Tribunal held that the reassessment notice issued under Section 148 on 05/04/2021 for AY 2015-16 was time-barred. Relying on Supreme Court judgments in Rajeev Bansal and Deepak Steel, it was affirmed that the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act (TOLA) does not extend the limitation period for this assessment year, a point conceded by the Revenue. Consequently, the reassessment order and the CIT(A)'s order were quashed.
Key Issues
Whether reassessment proceedings initiated by a notice under Section 148 on 05/04/2021 for Assessment Year 2015-16 are time-barred, considering the non-applicability of the TOLA provisions for extending the limitation period as per Supreme Court pronouncements.
Sections Cited
147, 148, 148A(b), 148A(d), 149, 149(1), 149(1)(a), 149(1)(b), 151
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH: ‘E’ NEW DELHI
Before: SHRI YOGESH KUMAR U.S
ORDER
PER YOGESH KUMAR, U.S. JM:
The present appeal is filed by the Revenue against the order of Ld. Commissioner of Income Tax (Appeals)-29, (‘Ld. CIT (A)’ for short), New Delhi dated 28/03/2025 for the Assessment Year 2015-16.
Brief facts of the case are that, Assessee filed its return of income for the year under consideration declaring income of Rs. 18,18,380/-. An assessment order came to be passed u/s 147 of the Act on 30/05/2023 by computing the income of the Assessee at Rs. 72,84,905/- as against the returned income of Rs. 18,18,380/-. Aggrieved by the assessment order dated 30/05/2023, Assessee preferred Appeal before the Ld. CIT(A). The Ld. CIT(A) vide order dated 28/03/2025, dismissed the Appeal of the Assessee.
Shailesh Kumar Vs. ACIT 3. The Ld. Counsel for the Assessee addressing on the additional grounds of Appeal submitted that the reassessment proceedings for year under consideration is time-barred. Further submitted that the notice u/s 148 was issued on 05/04/2021, followed bythe notice u/s 148A(b) dated 02/06/2022, the order u/s 148A(d) dated 29/07/2022, and the further notice u/s 148 of the Act dated 30/07/2022, could not validly be issued for Assessment Year 2015- 16 in view of the limitation prescribed u/s 149 of the Act, rendering the entire reassessment proceedings void and without jurisdiction. The Ld. Counsel for the Assessee relying on the Judgment of Hon'ble Supreme Court Union of India Vs. Rajeev Bansal 2024 SCC OnLineSC 2693, sought for allowing the Appeal.
Per contra, the Ld. Departmental Representative submitted that Additional grounds of Appeal of the Assessee and on the contention that notice issued u/s 148 of the Act is barred by limitation does not have merit. Further submitted that, issuing of the notice and the initiation of re-assessment proceedings are well within the limitation and as per law, thus relying on the order of the Lower Authorities, sought for dismissal of the Appeal.
We have heard both the parties and perused the material available on record. In the present case, Assessment Year involved is 2015-16. A Notice u/s 148 of the Act was issued on 05/04/2021.
Shailesh Kumar Vs. ACIT Supply of information post judgment dated 04/05/2022 in the case of Union of India Vs. Ashish Agarwal was on 02/06/2022, Order u/s 148A (D) of the Act was passed on 29/07/2022 and the Notice u/s 148 of the Act was issued on 30/07/2022.
On the issue of issuance of notice u/s 148 of the Act, various writ petitions were filed before various Hon'ble High Courts and ultimately Hon'ble Supreme Court in the case of Union of India vs. Ashish Agarwal (supra) decided the matter. After the decision of the Hon'ble Supreme Court in the case of Ashish Agarwal (supra), the A.O. issued notice u/s 148A(b) of the Act on 26/05/2022.
In the present case, the Ld. Assessee's Representative submitted following date chart in order to apply the ratio laid down the case of Rajeev Bansal (supra). Date Particulars 2015-16 Assessment Year of the present Appeal. 05.04.2021 Notice issued u/s 148 of the Income Tax Act, 1961 02.06.2022 Supply of Information post-judgment dated 04.05.2022 rendered in the case of Union of India Vs. Ashish Agarwal 29.07.2022 Order u/s 148A(d) of the Income Tax Act, 1961 was passed. 30.07.2022 Notice u/s 148 of the Act was issued.
The question arose for determination as to whether the benefit of TOLA extends to a reassessment notice issued under section 148 of the Act dated 05.04.2021 pertaining to Assessment Year 2015-16? The Hon'ble Supreme Court in Rajeev Bansal (supra) has Shailesh Kumar Vs. ACIT unequivocally held that TOLA does not apply to reassessment notices issued under the old regime for Assessment Year 2015-16, since the limitation period of three or six years, as prescribed under section 149(1) of the Act, did not fall within the period from 20.03.2020 to 31.03.2021, to which TOLA applies.
Further in the judgment of the Hon'ble Supreme Court in Rajeev Bansal (supra) at paragraph 19(f) records the express concession made by the Revenue that reassessment notices issued on or after 01.04.2021 for Assessment Year 2015-16 would not survive. The clarification is provided in paragraph 72, where the Court held that section 3(1) of TOLA cannot operate to extend the limitation period beyond what is prescribed under section 149(1)(b) of the un-amended Act, as it only applies where the original limitation expired between 20.03.2020 and 31.03.2021. For Assessment Year 2015-16, the limitation expired prior to 20.03.2020 and thus falls outside the ambit of the relaxation granted by TOLA. The relevant portion of the Judgment of Hon'ble Supreme Court in the case of Rajeev Bansal (supra) is extracted hereunder:
"19. Mr N Venkataraman, learned Additional Solicitor General of India, made the following submissions on behalf of the Revenue: *** *** *** e. The Finance Act 2021 substituted the old regime for re- assessment with a new regime. The first proviso to Section Shailesh Kumar Vs. ACIT 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: Assessm With Expiry With Expiry ent Year in 3 of in of (1)) year Limitati six Limitatio s (2) on r.w. year n r.w. TOLA s (4) TOLA for for (3) (5) 2013-14 31.03.2017 TOLA not 31.03.2020 30.06.20 applicable 21 2014-15 31.03.2017 TOLA not 31.03.2021 30.06.20 applicable 21 2015-16 31.03.2019 TOLA not 31.03.2022 TOLA not applicable applicable 2016-17 31.03.2020 30.06.2021 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; *** *** *** 63. TOLA extended the time limits for completion or compliance of certain actions under the specified Act, which fell for completion during the COVID-19 outbreak. The use of the expression "any" in Section 3(1)indicates that the relaxation applies to "all" or "every" action whose time limit falls for completion from 20 March 2020 to 31 March 2021. Section 3(1) is only concerned with the performance of actions contemplated under the provisions of the specified Acts. Consequently. the amendment or substitution of a provision under the specified Acts will not affect the application of TOLA, so long as the action contemplated under the provision falls for completion during the period specified by TOLA, that is, 20 March 2020 to 31 March 2021. .. ...
The non obstante clause in Section 3(1) has to be read as controlling the provisions of the specified Acts, including the provisions of the Income Tax Act. 127 In the context of the issuance of a reassessment notice, the non obstante clause will override the provisions of the Income Tax Act in case of any direct conflict or inconsistency. Section 3(1) overrides Section 149 only to the extent of relaxing the time limit for issuance of reassessment notice under Section 148. The time limit for issuance of a reassessment notices, which fall for completion between 20 March 2020 and 31 March 2021, has been extended till 30 June 2021. However, the non obstante clause under Section 3(1) of TOLA will operate neither to extend the time limit of three years from the end of the relevant assessment year under Section 149(1)(a) of the new regime nor to extend the time limit of six years from the end of the relevant assessment years under Section 149(1)(b) of the old regime. The non obstante clause ensures that the Revenue has additional time beyond the statutory stipulated time limit to complete or comply with the formalities given the administrative difficulties that arose due to the COVID-19 pandemic."
In view of the ratio laid down by the Hon'ble Supreme Court in the case of Rajeev Bansal (supra), the Hon'ble Supreme Court in another case reported in Deepak Steel and Power Ltd. v. CBDT [2025] 174 taxmann.com 144 (SC) reiterated the very same principle. The Hon'ble Supreme Court observed that, in view of the concession made by the Revenue in Rajeev Bansal, no further adjudication was required, and notices issued for Assessment Year 2015-16 after 01.04.2021 were dropped. The relevant portion of the Judgment is extracted as under: "4. The Learned counsel appearing for the revenue with his usual fairness invited the attention of this court to a three judge bench decision of this Court in Union of India and Ors.
Shailesh Kumar Vs. ACIT V. Rajeev Bansal, reported in 2024 SCC OnLine SC 2693, more particularly, paragraph 19(f) which reads thus:- "19. (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 Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020."
5. As the revenue made a concession in the aforesaid decision that is for the assessment year 2015-16, all notices issued on or after 1 April, 2021 will have to be dropped as they would not fall for completion during the period prescribed under the taxation and other laws (Relaxation and Amendment of certain Provision Act, 2020). Nothing further is required to be adjudicated in this matter as the notices so far as the present litigation is concerned is dated 25.6.2021"
Further, the jurisdictional High Court of Delhi, in a recent judgment in the case of Makemytrip India (P.) Ltd. v. Deputy Commissioner of Income Tax reported in [2025] 173 taxmann.com 497 (Delhi), held as under:
"11. In the present case the impugned notice was issued on 27.07.2022, which was admittedly beyond the period of limitation as prescribed under Section 149(1) of the Act. Since TOLA was not applicable in respect of the said notices under Section 148 of the Act for AY 2015-16 as conceded by the Revenue in the case of v. Rajeev Bansal (supra), the impugned notice is liable to be set aside."
In view of the above settled principals of law, the notice dated 05/04/2021 u/s 148 of the Act pertaining to Assessment Year 2015- 16 and the assessment order framed thereupon cannot be sustained
Shailesh Kumar Vs. ACIT in the eyes of law. Accordingly, we allow the Additional Grounds of appeal of the Assessee and quash the assessment order and the order of the Ld. CIT(A).
In the result, Appeal of the Assessee is allowed.