DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-20, DELHI , JHANDEWALAN vs. KRSKA CAPITAL PRIVATE LIMITED , DELHI
Before: SHRI SUDHIR KUMAR & SHRI MANISH AGARWALAssessment Year: 2016-17
PER SUDHIR KUMAR JM: The Revenue preferred the appeal, challenging the order dated 29-04-2025 passed by The Commissioner of Income –tax (Appeals)-27 New Delhi (in short Ld. CIT(A)) arising out the assessment order dated 29-05-2023 for A.Y. 2016-17 under the section 147 r.w.s 144B of the Income Tax Act, 1961(In short “the Act”). The assessee also filed the cross objection in the Revenue’s appeal. 2. The Revenue has raised the following grounds in appeal: 1. Whether the Ld. CIT(A) has erred in facts and in law in not appreciating the fact that the additions were made by the AO on the basis of credible information received from the Investigation Wing that assessee has availed accommodation entries from Maa Sharda Vincom Private Limited & M/s Manak Estate and Finance Private Limited. 2. Whether the Ld. CIT(A) has erred in facts and in law by ignoring the addition amounting to Rs.5,00,00,000/- (part of total Date of hearing 12.02.2026 Date of pronouncement 18.03.2026
accommodation entries taken from M/s Manak Estate and Finance
Private
Limited
&
Maa
Sharda
Vincom
Private
Limited i.e.7,75,00,000/- during Vivad se Vishwas proceedings in the case of the assessee.
3. . Whether the Ld. CIT(A) has erred in facts and in law by ignoring statement of Sh. Ashish Wegwani recorded u/s 132(4) of the Act in which he has accepted that he is an entry operator and the entry from whom the assessee has availed loan is operated by him to facilitate accommodation entries to beneficiaries.
4. . Whether the Ld. CIT(A) has erred in facts and in law by stating that Assessing Officer placed heavy reliance on statements and Investigation Inputs, wherein the AO acted upon detailed investigation findings corroborated through the statement of Mr. Ashish Begwani, seizure of Excel sheets from the premises of entry operators and pattern analysis indicating large-scale entry operations. The AO applied mind to the modus operandi and assessed the transaction in light of section 68 of the IT Act, requirements-identity creditworthiness and genuineness which were fully discharged by the assessee.
Whether the Ld. CIT(A) has erred in facts and in law in reducing the rate of commission without considering the fact that during the assessment proceedings the assessee has failed to submit details of parties transportation invoices, addresses of godowns etc.to establish the genuineness of transactions made by him. 6. Whether the Ld. CIT(A) has erred in facts and in law in presuming that absence of direct bank evidence invalidates the case. However, the essence of accommodation entries is laundering unaccounted cash in exchange for cheques. These are professionally masked transactions and the cask trail is deliberately hidden. The AO’s conclusion was based on preponderance of probability a valid legal standard under tax jurisprudence and supported by third –party statements and seized documents. 3. The brief facts of the case are that the assessee filed his return of income for A.Y. 2016-17 on 20-09-2016 by declaring total income of Rs.7,03,59,660/-. The case of the assessee was selected for scrutiny under CASS and order u/s 143(3) of the Act was completed on 29-12- 2018 assessing total income at Rs.17,07,25,830/-. In this case, Information received through Insight portal stating that Krska Capital
Pvt. Ltd. has entered into several transaction during F.Y.2015-16. As per information a search was conducted in the case of Sh. Ashish
Begwani and his associates on 22-10-2016. It was found that Asish
Begwani and his associates were engaged in facilitating and providing accommodation entries of Loans, Share Capital/ Share Premium
Bogus long term capital gain carrying out hawala transaction. From the analysis it was found that the assessee has taken accommodation entries from Maa Sharda Vincm Pvt. Ltd. and Manak Estate and finance Pvt. Ltd. of Rs.7,75,00,000/-. After recorded the reasons to believe a notice u/s 148 of the Act was issued to the assesse on 28-06-
2021. In the compliance of the direction of the Hon’ble Supreme Court in the case of Asish Agarwal again notice dated 20-05-2022 was issued. In the compliance of the notice the assessee filed the objection on 06-06-2022 and the Assessing Officer passed the order u/s 148A(b) of the Act and the notice was issued with prior approval of Pr. CIT-4
Delhi dated 22-07-2022. The Assessing Officer completed the assessment after making the addition of Rs.2,83,25,000/- on the various heads.
Being aggrieved with the order of the AO, the assessee filed the appeal before the Ld. CIT(A), who vide his order dated 22-04-2025 allowed the appeal of the assessee. 5. Aggrieved the order of the Ld. CIT(A), the Revenue is in appeal before the tribunal. The assessee also filed the cross objection in the appeal. 6. Cross Objection No. 285/Del/2025 In the cross objection has filed on the following grounds: (i) Because on facts and in law, the CIT(A) erred in not holding that the order passed under section 148A(d) and notice issued under section 148 both dt. 29-07-2022 were invalid and bad in law being time barred as per the provisions of section 149 of the Act as laid down by the Hon’ble Supreme Court in the case of Union of India vs. Rajeev Bansal [2024] 469 ITR 46 SC. Accordingly the impugned assessment order is liable to be quashed. (ii) Because on facts and in law, the CIT(A) erred in not annulling the reassessment as order under section 148A(d) and notice issued under section 148 both dt. 29-07-2022 for assessment year 2016-17 were beyond the period of three years approval was required to be obtained as per the amended provision of section 151(ii) of the Act from the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General instead of Principal Commissioner of Income-tax-4 Delhi.
(iii)
Because the order appealed against (filed by revenue) to the extent mentioned above is contrary to law and facts of the case.
7. The assessee has moved an application to condone the delay in filing the cross objection. The assessee stated that the assessee has received the papers of the appeal on 19-08-2025 then in the month of,
November the assessee company approached the CA to file the cross objections before the tribunal The assessee company has shown the sufficient cause not to file the cross objection within time. Therefore, the delay is condoned and cross objection is admitted.
8. Firstly we take the ground of the cross objection which is legal. The Ld. AR for the assessee has raised the legal issue and stated that the notice dated 27-07-2022 issued by AO u/s 148 of the Act is time barred. In this regard he has submitted as under :
Assessment year 2016-17
First notice issued u/s 148 of the Act old Regime (pg.4 of PB) 28-06-2021
Extended deadline to issue notice u/s 148 of the Act old regime 30-06-2021
As per TOLA and notification issued
Surviving Time Limit 30-06-2021
Date of SC order in Ashish Agarwal’s case 04-05-2022
Date of providing information/notice u/s 148A(b) in pursuance of Ashish Agarwal (pg.5-9 of PB) 20-05-2022
Time limit to file the reply as u/s 148A(b) i.e within 2 week 06-06-2022
Replied file by the assessee (pg.1023) 06-06-2022
Time excluded as per Rajeev Bansal’s Case 28-06-2021-to 6-06-2022
Time that was available /left to issue notice u/s 148 AS TOLA limit 2 days
Extended time to be given as per fourth Proviso to section 149(1) 7 days
Time limit to issue notice u/s 148 as per section 149(as amended by Finance Act,
2021 and as per Rajeev Bansal’s case ) i.e. 7 days from 13-06-2022
Order passed u/s 148 A(d) (pg. 24-29) 29-07-2022
Notice u/s 148 of the Act with prior approval of Pr. CIT-4 Delhi(pg.30-32 of PB) 29-07-2022
The Ld. AR submitted that in consequence to the directions issued by the Hon’ble Supreme court in the case of Union of India vs. Ashish Agarwal dated 04-05-2022 the Assessing Officer issued the fresh notice u/s 148 of the Act on 29-07-2022. He further submitted that as per the section 149 of the Act the notice u/s 148 of the Act could be issued within a period of three years from the end of the relevant assessment year i.e 2016-17 with the prior approval of Principal Commissioner of Income –tax who was not the competent authority for approval. In the present case the notice u/s 148 of the Act was issued on 29-07-2022 which is beyond time. Reliance has placed on the decisions of Union of India & Ors. Vs. Rajeev Bansal 2024 (10) TMI 264 Supreme Court (LB) in this Case the Hon’ble Supreme Court held as under: “110. The effect of the creation of the legal fiction in Ashish Agarwal (Supra) was that it stopped the clock of limitation with effect from the date of issuance of section 148 notices under the old regime {Which is also the date of issuance of the deemed notices}. As discussed in the preceding segment of the judgment, the period from the date of the issuance of the deemed notices till the supply of relevant information and material by the assessing officer to the assessee in terms of the direction issued by this court in Ashish Agarwal (Supra) has to be excluded from the computation of the period of limitation. Moreover, the period of two weeks granted to the assessee to reply to the cause notices must be excluded in terms of the third proviso to section 149. 111. The clock started ticking for the Revenue only after it received the response of the assessee to the show cause notices. After the receipt of the reply, the assessing officer had to perform the following responsibilities; (i) consider the reply of the assessee under section 149A(C );(ii) take a decision under section 149A(d ) based on the available material and the reply of the assessee; and (iii) issue a notice under section 148 if it was a fit case for reassessment. Once the clock started ticking, the assessing officer was see State of AP v. AP Pensioners Association, (2005) 13 SCC 161 [28]. [This court observed that the “legal fiction undoubtedly is to be construed in such a manner so as to enable a person, for whose benefit such legal fiction has been created, to obtain all consequences flowing there form.”] PART F required to complete these procedures within the surviving time limit. The surviving time limit, as prescribed under the Income Tax Act read with TOLA, was available to the assessing officers to issue the reassessment notices under section 148 of the new regime. 112. Let us take the instance of a notice issued on 1 May 2021 under the old regime for a relevant assessment year. Because of the legal fiction, the deemed show cause, notice will also come into effect from 1 May 2021. After accounting for all the exclusions, the assessing officer will have sixty –one days [days between 1 May 2021 and 30 June 2021] to issue a notice under section 148 of the new regime. This time starts ticking for the assessing officer after receiving the response of 10
the assessee. In this instance, if the assessee submits the response on 18 June 2022, the assessing officer will have sixty-One days from 18
June 202 to issue a reassessment notice under section 148 of the new regime. Thus, in this illustration, the time limit for issuance of a notice under section 148 of the new regime will end on 18 August 2022.”
10. Reliance is also placed on the judgment of the Juri ictional High
Court of Delhi in the case of Communist Party of India (Marxist) v.
Income Tax Department [2025] 174 taxmann.com 925 (Delhi) dated
28-04-2025. 11. The Ld. DR has submitted that assessee, company has never raised this issue that the assessment, is time barred before the Ld.AO during the re-assessment proceedings. The notice was issued within time in the pursuant to the judgment of the Hon’ble Supreme Court in Union of India v. Ashish Agarwal after complying the all conditions. She relied the order of the Assessing Officer.
12. We have heard the parties and perused the material available on record. In view of the observation of the Hon’ble Supreme Court in the case of Rajeev Bansal (Supra) the extended due date for issuance of notice u/s 148 of the Act expired on 13-06-2022 and since, the notice u/s 148 of the Act was issued on 29-07-2022 the said notice is to be treated as time barred by limitation. In the present case notice u/s 148
of the Act was issued on 29-07-2022 i.e. 3 years have lapsed from the end of the relevant assessment year, thus prior approval from the competent authority was needed but the competent authority in the case of assessee should have been Principal Chief Commissioner of Income
Tax, whereas approval has been taken from the Principal
Commissioner of Income Tax-4, Delhi. Respectfully following the decision of the Hon’ble Supreme Court, we allow the grounds raised in cross objection by quashing the reassessment order. As a result the appeal of the revenue is dismissed.
13. In the result the appeal of the Revenue is dismissed and the cross objection of the Assessee is allowed.
Order pronounced in the open court on 18/03/2026. (MANISH AGARWAL)
JUDICIALMEMBER
Dated: 18/03/2026
“SR BHATNAGGR”