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Facts
The assessee's appeal for assessment year 2015-16 challenged an order by the CIT(A) concerning reassessment proceedings. The primary issue was the validity of the reopening initiated by the Assessing Officer (AO) through a notice under Section 148 dated March 31, 2021, which was served on April 1, 2021.
Held
The Tribunal held that since the Section 148 notice was served after the amendment by the Finance Act, 2021, the reopening proceedings ought to have been initiated under the 'New Scheme' (Sections 148A and amended Section 148). As the AO failed to follow the prescribed procedure under Section 148A, the reassessment order was quashed.
Key Issues
Validity of reassessment proceedings initiated by a Section 148 notice issued before but served after the amendment of Section 148 and introduction of Section 148A, without following the new procedure.
Sections Cited
147, 148, 144, 148A
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ORDER
PER SATBEER SINGH GODARA, JM
This assessee’s appeal for assessment year 2015-16, arises against the Commissioner of Income Tax (Appeals)-3 [in short, the “CIT(A)”], Delhi’s order dated 18.10.2024 passed in case no. CIT(A), Kanpur-4/10273/2014-15, involving proceedings under section 147 r.w.s. 144 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Heard both the parties. Case file perused.
For the reasons stated in the assessee’s condonation averments, delay of 252 days in filing of the instant appeal is condoned in light of Collector, Land & Acquisition vs. Mst. Katiji & Others (1987) 167 ITR 471 (SC).
It transpires during the course of hearing that there arises the first and foremost issue of validity of the impugned reopening itself which the learned assessing authority set into motion against the assessee vide notice dated 31st March, 2021 (page 23 in the paper- book), which stood served vide email on 01.04.2021 at 7.28 AM (page 22 in the case records).
It is in this factual backdrop that the assessee vehemently submits that the impugned reopening is not sustainable in law. The fact that it is deemed to have been initiated under the “New Scheme” than the old one which strongly contested at the Revenue’s behest.
That being the case, we find that the instant issue of validity of the impugned reopening is no more res integra in light of the 2 | P a g e tribunal’s recent order/decision dated 26.09.2025 in DCIT Vs. Suncity Infrastructures Pvt. Ltd.; reading as under: “9. Heard both the parties and perused the materials available on record. It is seen from the perusal of the page 49 of the PB which is the copy of the mail alongwith which the notice u/s 148 was served upon the assessee on 1st April, 2021. The relevant extract to the mail is reproduced as under: Dinesh Gupta From: DELHLITO24,1@INCOMETAX.GOV.IN Sent: 01 April 2021 07:28 To: dineshgupta@suncityprojects.com Subject: (ITBA) Notice under section 148 of the Income Tax Act, 1961 Attachments: AAICS7928N_Notice us 148 1032078041(1) 31032021.pdf Dear SUNCITY INFRASTRUCTURES PRIVATE LIMITED Please find attached the Notice u/s 148 for PAN: AAICS7928N and AY:2015-16. Please quote your PAN in all future correspondences. Note: -This communication is computer generated and may not contain signature. This communication may be treated as compliant with the requirements of Income Tax Rules 127 and 127A. -Signed copy may be sent separately if not already digitally signed. -Please quote your PAN in all communications. - Income Tax Department does not seek any taxpayer information like user name, password, details of ATM, credit cards, etc. Taxpayers are advised not to part with such information on the basis of emails.
The fact of receipt of notice u/s 148 by the assessee on 01.04.2021 is further accepted by the AO in the order passed u/s 148A(d) disposing the objections raised by the assessee, wherein the AO has made following observations: “First of all, it is submitted that the assessee has filed its objection on 09.02.2021 whereas notice u/s.142(1) of the Act was issued on 07.12.2021 seeking specific details in connection with its assessment proceedings.
3 | P a g e As far as contention raised by the assessee at point no.8 is concerned, the same is not acceptable in view of the fact that the notice u/s 148 was generated and duly digital signed by the then AO on the very same day ie. 31.03.2021 at 5:51 PM as clear from the plain reading of the said notice. Due to some technical reasons it was sent and served on 01.04 2021 by the ITBA system. However, as far as question of discharging the onus to issue of the notice is concerned, the then AO had discharged his onus to issue the notice by generating it on 31.03.2021 at 5:51 PM. The notice is generated by the AO means notice has been issued and sent to the assessee, In other words, it implies that notice has been emailed to assessee through ITBA system to the assessee's e- filing account for service. When the AO generates a notice his work is accomplished. Now the role of ITBA system is started and accordingly, the notice is sent to the assessee by the system. Further on plain reading of DIN and Notice No. of the same notice [DIN & Notice No: ITBA/AST/S/148/202021/1032078041(1)]. It is apparent that the notice is issued in FY.2020-21. Therefore, date of notice should be treated as date of issuance of such notice. In view of the above contention raised by the assessee at point no.3, 5, 6,7,8 and 9 are not acceptable.”
From the perusal of the above, it could be seen that it is an admitted position that notice u/s 148 was served upon the assessee on 1st April, 2021, therefore, the reassessment proceedings must be initiated only after following the amended provisions as provided in amended section 148 and u/s 148A of the Act as inserted by the Finance Act, 2021. The Hon’ble Supreme Court in the case of Union of India vs. Ashish Agarwal (supra) held that all the notices issued between period from 01.04.2021 to 30.06.2021 be treated as notice issued u/s 148A(b) of the Act and directions were given to the AO’s o follow the procedure as prescribed u/s 148A before issue of notice u/s 148 of the Act.
In the instant case, the assessee vide letter dated 09.02.2022 raised this objection before the AO and AO was well within his knowledge that notice issued u/s 148 dated 31.03.2021, was served upon the assessee on 01.04.2021 therefore, he was under the obligation to treat the said notice as issued u/s 148A(b) of the Act and due procedure as prescribed u/s 148A must be followed which has not been done in the instant case. The Hon’ble Jurisdictional High Court in the case of Suman Jeet Agarwal and Ors. vs. ITO & Ors. [2022] 449 ITR 517 (Del.) under identical circumstances has held that the notice issued u/s 148 prior to amendment and was served upon the assessee after the amendment, therefore, the same has to be treated as notice u/s 148A(b) and if the said procedure is not followed, the same is liable to be quashed. The relevant extract of the Hon’ble Jurisdictional High Court has contained in para 31 are as under:
4 | P a g e “31. For the reason and principles that we have laid down, we dispose of these Writ Petitions with the following directions. Category ‘A’,: The Notices falling under category 'A', which 31.1 were digitally signed on or after 14 of Apr, 2021 are held is bear the date on which Notices were digitally signed and not 31st March 2021. The said petitions are disposed of with the direction that the said Notices are to be considered as show cause-notices under Section 148A (h) of the Act as per the directions of the apes Court in the Ashish Agarwal (Supra) judgment. Category ‘B’,: The Notices falling under category ‘B' which 31.2 were sent through the registered e-mal ID of the respective JAOs. Though not digitally singed are held to be valid. The said petitions are disposed of with the direction to the JAOs to verify and determine the date and time of is despatch as recorded in the ITBA portal in acceptance with the law laid down in this judgment as the date of issuance. If the date and time of despatch recorded is on or after of 2021 the Notices are to be considered as show-causenotices under Section 148A (b) as per the directions of the apex Court in the Ashish Agarwal (Supra) judgment.
Category ‘C’: The petitions challenging Notices falling under category. C' which were digitally signed on 31st of March 2021 to the JAOs to verify and determine the date and time of despatch as recorded in the ITIBA portal in accordance with the law laid down in the of issuance. If the date and time of despatch recorded is on or before 1st of April, 2021, the Notices are in be considered as show cause notes under Section 1464 (b) as per the directions of the apex Court in the Ashish Agarwal (Supra) judgment. 31.4. Category ‘D’: The petitions challenging Notices falling under category D' which were only uploaded in the E-filing portal of the assesses without any re alert, are disposed of with the direction to the JAOs to determine the date and time when the assessees viewed the Notices in the E-f-ling portal, as recorded in the ITBA portal and conclude such date as the date of issuance in accordance with the law laid down in this judgment. If such date of issuance is determined to be on or after 1st of April 2021, the Notices will be construed as issued under Section 1484 (b) of the Act of 1961 as per the Ashish Agarwal (Supra) judgment. 31.5 Category ’E’: The petitions challenging Notices falling under category which manually despatched. disposed of with the direction to the JAD determine in accordance with the law laid down in this judgment, the date and time when the Notices were delivered to the post office for despatch and consider the date and time of despatch 5 | P a g e recorded is on or after. 1st of April, 2021, the Notices are to be construed as show-cause-notices under Section 148A (b) as per the directions of the apex Court in the Ashish Agarwal (Supra) judgment. 31.6. Notices sent to unrelated e-mail addresses. The petitions challenging Notices which were sent to unrelated e-mail addresses are disposed of with the direction the JAOs to venrify the date on which the Notice was first viewed by the assessee on the E-filing portal and consider the same as the date of issuance. If such date of Issuance is determined to be on or after 01st April, 2021, the Notices will be construed issued under Section 148A (b) of the Act of 1981 as per judgment in Ashish Agarwal (Supra) 31.7. We may note that in the writ petitions, the petitioners have raised additional defenses to challenge the impugned Notices. Such additional defenses have not been considered by this Court and the petitioners shall be at liberty to raise all such additional defenses as available in law 31.8. We are conscious that the time granted by the Supreme Court in Ashish Agarwal to the Department has since expired on 3rd June, 2022 however, the proceedings in the present wit petitions were stayed on 24th March, 2022 until the pronouncement of this judgment. Therefore, we grant the JACs in the instance eight (8) weeks time from today to determine the date of issuance of the Notices as per the law laid down in this judgment. 31.9. The Notices which in accordance with the law laid down in this judgment has been verified by the JAOs to have been issued on or after 01st April 2021 and until 30th June, 2021 shall be deemed to have been issued under Section 148A of the Act of 1961 as substituted by the Finance Art, 2021 and construed to be show- cause notices in terms of Section 148A(b) as per the judgment of the apex Court in Ashish Agarwal (Supra) and the JAOs shall thereafter follow the procedure set down by the Supreme Court in the said judgment which reads as follows:
“26 view of the above and for the reasons stated above, the present Appeals are ALLOWED IN PART. The impugned common judgments and orders passed by the High Court of Judicature at Allahabad in WT. No. 624/2021 and other allied tax appeals/petitions, is/are hereby modified and substituted as under:-
(1) The impugned section 148 notices issued to the respective assessees which were issued under unamended section 148 of the 6 | P a g e IT Act, which the subject matter of wit petitions before the various respective High Courts shall be deemed to have been issued under section 148A of the IT Act as substituted by the Finance Act, 2021 and construed or treated to be show cause notices in terms of section 148A(b) The assessing officer that within thirty days from today provide to the respective assessees information and material relied upon by the Revenue, so that the assesees can reply to the show- cause notices within two weeks thereafter; The requirement of conducting any enquiry, if required, with (ii) the prior approval of specified authority under section 148A(a) is hereby dispensed wit as a one-time measure vis-à-vis those notices which have been issued under section 148 of the unamended Act from 1-4-2021 till date, including those which have been quashed by the High Courts. Even otherwise as observed hereinabove holding any enquiry with the prior approval of specified authority is not mandatory but it is for the concerned Assessing Officer to hold any enquiry, if required. The assessing officer shall thereafter pass orders in terms of (iii) section 148A(d) in respect of each of the concerned assesseess; Thereafter, after following the procedure required under section 148A may issue notice under section 148 (as substituted); (iv) All defences which may be available to the assesses including those available under section 149 of the IT Act and all nights and contentions which may be available to the concerned assessees and Revenue under the Finance Act, 2021 and in law shall continue to be available.” (v) 13. This view is also expressed by the Hon’ble jurisdictional High Court in the case of Makemytrip India Private Limited (supra).
In view of the above facts, in our considered opinion, in the instant case, the order passed u/s 147 of the Act based on the notice issued u/s 148 dated 31.03.2021 which was served upon the assessee on 1st April, 2021 is bad in law as the same was issued without following the due procedure as provided under the amendment section 148 and 148A of the Act and the consequent reassessment order passed is hereby quashed.
Since, we have allowed the assessee’s prayer under Rule 27 of ITAT Rule, 1962, by allowing the legal grounds of appeal
, therefore, grounds of appeal taken by the Revenue become academic and not adjudicated.
16. In the result, the appeal of the Revenue is dismissed.” 7 | P a g e
6. We adopt the above detailed reasoning to conclude that the impugned reopening initiated vide notice under section 148 dated 31st March, 2021 getting served on 01.04.2021 ought to have been proceeded under the “New Scheme” in very terms. All other remaining pleadings between the parties stand rendered academic.
7. This assessee’s appeal is allowed. Order pronounced in the open court on 12th February, 2026 Sd/- Sd/- (NAVEEN CHANDRA) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 27th February, 2026. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi
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