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Facts
The assessee, proprietor of M/s Anu Agencies, filed a return for AY 2015-16. The Assessing Officer (AO) determined a higher total income by making various additions. The CIT(A) set aside the assessment and referred the case back to the AO for fresh assessment. The assessee appealed to the ITAT.
Held
The Tribunal held that the notice issued under section 148 on 28/07/2022 was barred by limitation, following the Supreme Court's decision in Union of India vs. Rajeev Bansal. Consequently, the assessment order was quashed and set aside.
Key Issues
Whether the notice issued under Section 148 was barred by limitation, and whether parallel assessment proceedings were conducted without proper procedures.
Sections Cited
148, 142(1), 148A, 143(2), 40a(a), 69C, 151, 147, 144B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, LUCKNOW BENCH ‘A’, LUCKNOW
Before: SHRI SUBHASH MALGURIA & SHRI NIKHIL CHOUDHARY
2015-16 against the impugned appellate order dated 24/03/2025 (DIN & Order No.ITBA/NFAC/S/250/2024- 25/1074953655(1) of Commissioner of Income Tax (Appeals) [“CIT(A)” for short]. In this appeal the assessee has raised the following grounds:
“1. Because the first notice u/s 148 is issued dated 20.04.2021 is without jurisdiction in as much as the same has been issued overlooking the provision of section 142(1) and New Provision of Section 148A w.e.f. 01.04.2021 of the Act which is not permissible.
2. Because the second notice u/s 148 is issued dated 28.07.2022 is without jurisdiction in as much as the same has been issued overlooking the provision of section 142(1) and New Provision of Section 148A w.e.f. 01.04.2021 of the Act which is not permissible, this second notice is issued without disposal of first notice dated 20.04.2021 the reassessment framed be quashed but the ld. CIT(A) wrongly set aside the case ignoring the facts of the case and grounds and additional grounds submitted before him.
Because the first Notice u/s 148 is closed by Directorate of Income Tax (Systems) on 17-01-2023 but there were two notices u/s 148 are under process till 17-01-2023. The first notice is closed by the deptt. on the basis of judgment of Hon'ble Supreme Court in the case of Union of India vs Ashish Agarwal Civil Appeal no. 3005/22 dated 04.05.2022, hence again reassessment notice u/s 148 is invalid and liable to be quashed but the ld. CIT(A) wrongly set aside the case ignoring the facts of the case and grounds and additional grounds submitted before him.
Because the second notice u/s 148 is issued on 28.07.2022 and in compliance of this notice the assessee has filed her return of income within thirty days on 26.08.2022 but the ld. A.O. NFAC Nor JAO has issued notice u/s 143(2) of the Act, hence without issue of notice u/s 143(2) of the Act. The assessment made by the ld. A.O. and set aside by the ld. CIT(A) is against the merits and circumstances of the case.
5. Because the CIT(A) has erred on facts and in law in arbitrarily set aside of the case for the addition of Rs.3,65,00000/- made by AO on account of credit in current account and variation in business income as disallowance u/s 40a(a) amounting Rs.52,58,848/- and addition u/s 69C as unexplained expenditures Rs.4,09,925/- during the period 03.03.2015 to 03.07.2015 which relates two financial years, there was no reason AO to disallow, and for the CIT(A) to set aside for fresh reassessment of the same.
6. Because on facts and circumstances of the case that the notice u/s 148 and consequent proceeding u/s 151 for approval granted by CIT in an improper manner hence approval is invalid and proceeding cannot be upheld.
Because on the facts and circumstances of the case and in law the A.O. has erred to make addition of Rs.3.65 crore on the basis of information received from Dy. Director (Inv) which was related the period 03.03.2015 to 03.07.2015 (Two Asstt. Years)
Because on the facts and circumstances of the case and in law the addition made by the A.O. is beyond the scope of provision of section 147/148 of the I.T. Act and the CIT(A) wrongly set aside for reassessment which is bad in law. However the first notice u/s 148 dated 20.04.2021 is already closed by the directorate of income tax (systems) on the basis of judgment of Hon'ble Supreme Court In the case of Union of India vs Ashish Agarwal Civil Appeal no. 3005/22 dated 04.05.2022.
Because on the facts and circumstances the assessment order passed u/s 147/144 on the basis of two year's information and addition of Rs.3.65 crore for two years is made in one year which is against the law. But the ld. CIT(A) has also ignored this fact and set aside for reassessment which is bad in law.”
The facts of the case, in brief, are that the assessee is an individual and proprietor of M/s Anu Agencies, carrying on business of distribution of recharge coupon, cash cards and SIM cards of TATA Docomo and Airtel, and trading of hand sets of Tata Docomo during the financial year 2014-15. The assessee filed her return of income on 30/09/2015 declaring total income of Rs.7,91,300/- comprising of income from business and other sources. The Assessing Officer completed the assessment and passed assessment order on 18/05/2023 under section 147 read with section 144B of the Income Tax Act and determined the total income of the assessee at Rs.4,29,60,070/- by making various additions. Aggrieved, the assessee carried the matter in appeal before the learned CIT(A) who has set aside the assessment and referred the case back to the file of the Assessing Officer for making a fresh assessment. Aggrieved further, the assessee is in appeal before the Income Tax Appellate Tribunal.
3. Arguing the case on legal issue, the learned Counsel for the assessee submitted that two proceedings of assessment under section 147 were going on parallel for assessment year 2015-16 against notice under section 148 dated 20/04/2021 and dated 28/07/2022. Learned Counsel for the assessee further submitted that the first notice under section 148 was issued on 20/04/2021 and without disposal of 1st notice issued on 20/04/2021 under section 148, another notice under section 148 was issued on 28/07/2022. Learned Counsel for the assessee further submitted that in compliance to notice under section 148 dated 28/07/2022, the assessee has filed her return of income within thirty days on 26/08/2022 however, no notice under section 143(2) was issued by the Assessing Officer which is mandatory for completion of assessment order. He also submitted that the first notice under section 148 was closed by Directorate of Income Tax (Systems) on 17/01/2023 but two notices under section 148 were under process till 17/01/2023. Learned Counsel for the assessee submitted that the assessment order passed under section 147 read with section 144B without issue of notice under section 143(2) is not valid. He also submitted that the notice issued under section 148 on 28/07/2022 is barred by limitation. To support his contention, learned Counsel for the assessee relied on the order of Hon'ble Supreme Court in the case of Union of India vs. Rajeev Bansal, reported in 2024 SCC Online SC 2693.
4. Learned Departmental Representative, on the other hand, supported the orders of the Assessing Officer and learned CIT(A).
We have heard the rival parties and have gone through the material placed on record. On the claim of the assessee that two parallel assessment proceedings were being conducted, one against notice under section 148 dated 20/04/2021 and another notice u/s 148 dated 28/07/2022, the learned CIT(A) has dismissed this plea of the assessee by observing under para 6.3 of his order, which is reproduced as under:
5.1 The claim of the learned Counsel for the assessee is that the notice issued under section 148 of the Act on 28/07/2022 is barred by limitation. To strengthen his claim, learned Counsel for the assessee has relied on the order of Hon'ble Supreme Court in the case of Union of India and Ors. vs. Rajeev Bansal, reported in 2024 SCC Online Supreme Court 2693. The observation of Hon'ble Supreme Court under para 19(f) is reproduced as under:
19(f) The Revenue concedes that for the assessment year 2015-16, all notices issued on or after April, 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.
5.2 In the above case, Hon'ble Supreme Court has clearly directed that as the Revenue made a concession that all notices issued on or after 1st 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 Provisions) Act, 2020 and nothing further is required to be adjudicated as the notice issued is dated 25/06/2021. In the present case also, since the notice under section 148 of the Act has been issued on 28/07/2022, as per the above judgment of Hon'ble Supreme Court, 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 above, the assessment order dated 18/05/2023 is quashed and set aside.
In the result, the appeal of the assessee stands allowed.
(Order pronounced in the open court on 31/10/2025)