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Facts
The assessee is appealing an order confirming an addition of Rs. 3,69,220/- under Section 68. The primary ground of appeal concerns the validity of the notice issued under Section 148, which the assessee argues was issued beyond the limitation period and without proper sanction.
Held
The Tribunal acknowledged that the ground regarding the validity of the Section 148 notice is purely legal and goes to the root of the jurisdiction. Citing Supreme Court judgments, the Tribunal noted that the issuance of such notices is subject to strict time limits derived from the date of the assessee's response.
Key Issues
Whether the notice issued under Section 148 was within the prescribed limitation period as per Supreme Court judgments, and whether it was issued with the proper sanction.
Sections Cited
148, 151, 68, 148A(b), 149
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, SURAT BENCH “SMC” SURAT
Before: SHRI SANDEEP GOSAIN & SHRI OM PRAKASH KANT
ORDER PER OM PRAKASH KANT, AM
This appeal by the assessee is directed against order dated 13.06.2025 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2017-2018, raising following grounds:
1. The Ld Assessing Officer has erred and was not just and proper on the facts of the case and in issuing notice u/s.148 without proper sanction as per section 151.
2. The Ld CIT(A), NFAC has erred and was not just and proper on the facts of the case and in law in confirming the addition of Rs.3,69,220/- u/s 68 of the Income-tax Act.
2.1 The notice u/s.148 may be quashed. The notice u/s.148 may be quashed. 2.2 The addition made by Ld Assessing Officer and The addition made by Ld Assessing Officer and The addition made by Ld Assessing Officer and confirmed by the Ld CIT(A) confirmed by the Ld CIT(A)-NFAC deleted. may be kindly NFAC deleted. may be kindly 2.3 Personal hearing may be granted. ersonal hearing may be granted. 2.4 Any other relief that your honours may deem fit may be Any other relief that your honours may deem fit may be Any other relief that your honours may deem fit may be granted. 3. appellant craves leave to add, a ce any or all of the above appellant craves leave to add, a ce any or all of the above appellant craves leave to add, a ce any or all of the above grounds.
At the threshold, the At the threshold, the Ld. Counsel for the assessee Ld. Counsel for the assessee pressed an additional ground assailing the very jurisdictional foundation an additional ground assailing the very jurisdictional foundation an additional ground assailing the very jurisdictional foundation of the reassessment proceedings, contending that the notice of the reassessment proceedings, contending that the notice of the reassessment proceedings, contending that the notice issued under Section 148 of the Income issued under Section 148 of the Income-tax Act, 1961 (“the Act”) tax Act, 1961 (“the Act”) was barred by limitation and that the mandatory sanction was barred by limitation and that the mandatory sanction was barred by limitation and that the mandatory sanction envisaged under Section 151 of the Act had not been obtained in envisaged under Section 151 of the Act had not been obtained in envisaged under Section 151 of the Act had not been obtained in the manner contemplated by law. the manner contemplated by law.
2.1 The said ground, being purely legal in character and going The said ground, being purely legal in character and going The said ground, being purely legal in character and going to the root of the matter, was admitted for adjudication, in to the root of the matter, was admitted for adjudication, in to the root of the matter, was admitted for adjudication, in consonance with the settled princip consonance with the settled principle that a legal plea touching le that a legal plea touching upon the jurisdiction of the authority may be raised at any stage upon the jurisdiction of the authority may be raised at any stage upon the jurisdiction of the authority may be raised at any stage of the proceedings, provided it does not necessitate fresh of the proceedings, provided it does not necessitate fresh of the proceedings, provided it does not necessitate fresh investigation of facts. investigation of facts.
In support of his contention, the In support of his contention, the Ld. Counsel for the Ld. Counsel for the assessee placed reli placed reliance upon the recent judgment of the ance upon the recent judgment of the Hon’ble Supreme Court Hon’ble Supreme Court in Union of India v. Rajeev Bansal & Union of India v. Rajeev Bansal & Others [(2024) 469 ITR 46 (SC)] [(2024) 469 ITR 46 (SC)] and submitted that the notice and submitted that the notice issued under Section 148 of the Act was manifestly beyond the issued under Section 148 of the Act was manifestly beyond the issued under Section 148 of the Act was manifestly beyond the limitation period as reckoned after limitation period as reckoned after giving effect to the directions giving effect to the directions of the Hon’ble Supreme Court in Union of India v. Ashish Union of India v. Ashish of the Hon’ble Supreme Court in Agarwal [2022 SCC OnLine SC 543]. [2022 SCC OnLine SC 543]. It was contended that the It was contended that the law laid down in Ashish Agarwal Ashish Agarwal (supra) carved out a limited carved out a limited survival period within which the Revenue could validly issue survival period within which the Revenue could validly issue survival period within which the Revenue could validly issue fresh notices, and any action beyond such statutory grace period fresh notices, and any action beyond such statutory grace period fresh notices, and any action beyond such statutory grace period would be non est in law. would be non est in law.
3.1 The Ld. Counsel for the assessee Ld. Counsel for the assessee has also placed on record has also placed on record a tabulated chronolo a tabulated chronology delineating the sequence of events gy delineating the sequence of events concerning the issuance of notice and the assessee’s response concerning the issuance of notice and the assessee’s response concerning the issuance of notice and the assessee’s response thereto, which is reproduced as under: which is reproduced as under:
3.2 Referring to the said chronology, it was submitted that the Referring to the said chronology, it was submitted that the Referring to the said chronology, it was submitted that the assessee had duly filed his response under Section assessee had duly filed his response under Section assessee had duly filed his response under Section 148A(b) on 26.05.2022, and upon applying the two , and upon applying the two-week survival period week survival period permitted by the Hon’ble Supreme Court in permitted by the Hon’ble Supreme Court in Ashish Agarwal Ashish Agarwal (supra), the last permissible date for issuance of notice under (supra), the last permissible date for issuance of notice under (supra), the last permissible date for issuance of notice under Section 148 would be Section 148 would be 12.06.2022. However, in the present case, . However, in the present case, the impugned notice was issued on the impugned notice was issued on 29.06.2022, which, according , which, according to the assessee, fell clearly beyond the statutory limit, rendering to the assessee, fell clearly beyond the statutory limit, rendering to the assessee, fell clearly beyond the statutory limit, rendering the entire reassessment proceeding void the entire reassessment proceeding void ab initio and without jurisdiction.
3.3 Per contra, the he Ld. Departmental Representative (DR) Ld. Departmental Representative (DR) contended that the factual matrix required verification from the contended that the factual matrix required verification from the contended that the factual matrix required verification from the assessment records. It was urged that the computation of assessment records. It was urged that the computation of assessment records. It was urged that the computation of limitation depended upon the date of the limitation depended upon the date of the last response last response submitted by the assessee, since the tw by the assessee, since the two-week survival period was to be week survival period was to be reckoned from that date and not from the first or any reckoned from that date and not from the first or any reckoned from that date and not from the first or any intermediate response. The intermediate response. The Ld. DR thus submitted that, in the thus submitted that, in the absence of clarity as to whether the response dated 26.05.2022 absence of clarity as to whether the response dated 26.05.2022 absence of clarity as to whether the response dated 26.05.2022 was indeed the final reply under Section 148 was indeed the final reply under Section 148A(b), the matter A(b), the matter warranted verification from the record of the Assessing Officer. warranted verification from the record of the Assessing Officer. warranted verification from the record of the Assessing Officer.
We have bestowed our anxious consideration to the rival We have bestowed our anxious consideration to the rival We have bestowed our anxious consideration to the rival submissions and have perused with care the material available submissions and have perused with care the material available submissions and have perused with care the material available on record. The controversy, though narrow in compass, on record. The controversy, though narrow in compass, on record. The controversy, though narrow in compass, involves the determination of a jurisdictional question the determination of a jurisdictional question — whether the impugned notice under Section 148 was issued within the period impugned notice under Section 148 was issued within the period impugned notice under Section 148 was issued within the period of limitation as preserved by the Hon’ble Supreme Court in of limitation as preserved by the Hon’ble Supreme Court in of limitation as preserved by the Hon’ble Supreme Court in Ashish Agarwal (supra) and as further elucidated in (supra) and as further elucidated in (supra) and as further elucidated in Rajeev Bansal (supra).
4.1 The ratio emerging from The ratio emerging from Ashish Agarwal (supra) is that the (supra) is that the notices notices notices issued issued issued during during during the the the interregnum interregnum interregnum period period period between between between 01.04.2021 and 30.06.2021 30.06.2021 under the erstwhile regime shall be under the erstwhile regime shall be treated as notices under Section 148A(b), and the Revenue would treated as notices under Section 148A(b), and the Revenue would treated as notices under Section 148A(b), and the Revenue would be entitled to issue fresh notices under the amended provision be entitled to issue fresh notices under the amended provision be entitled to issue fresh notices under the amended provision within a period of two weeks from the date of response submitted within a period of two weeks from the date of response submitted within a period of two weeks from the date of response submitted by the assessee. The subseq by the assessee. The subsequent decision in Rajeev Bansal Rajeev Bansal (supra) (supra) (supra) clarified clarified clarified and and and reaffirmed reaffirmed reaffirmed the the the limitation limitation limitation contours, contours, contours, emphasizing that such extended survival of time was to be emphasizing that such extended survival of time was to be emphasizing that such extended survival of time was to be construed strictly and could not be enlarged or extended by construed strictly and could not be enlarged or extended by construed strictly and could not be enlarged or extended by administrative interpretation. administrative interpretation.
4.2 In the present case, the assessee has contended that his case, the assessee has contended that his last response was filed on 26.05.2022 and that, accordingly, the last response was filed on 26.05.2022 and that, accordingly, the last response was filed on 26.05.2022 and that, accordingly, the extended limitation expired on 12.06.2022, while the Department extended limitation expired on 12.06.2022, while the Department extended limitation expired on 12.06.2022, while the Department asserts that further responses may have been filed thereafter. asserts that further responses may have been filed thereafter. asserts that further responses may have been filed thereafter. The record before us, The record before us, however, does not conclusively establish however, does not conclusively establish this factual aspect. Since the entire edifice of limitation hinges on this factual aspect. Since the entire edifice of limitation hinges on this factual aspect. Since the entire edifice of limitation hinges on the ascertainment of the last date of the assessee’s response, it is the ascertainment of the last date of the assessee’s response, it is the ascertainment of the last date of the assessee’s response, it is imperative that this fact be duly verified from the assessment file. imperative that this fact be duly verified from the assessment file. imperative that this fact be duly verified from the assessment file.
4.3 In view of the foregoing, and having regard to the binding view of the foregoing, and having regard to the binding view of the foregoing, and having regard to the binding dicta of the Hon’ble Supreme Court Hon’ble Supreme Court in Rajeev Bansal Rajeev Bansal (supra) and Ashish Agarwal (supra), we consider it just and proper to remit (supra), we consider it just and proper to remit (supra), we consider it just and proper to remit this additional ground to the file of the this additional ground to the file of the Ld. CIT(A) Ld. CIT(A) for limited verification. The Ld. CIT(A) Ld. CIT(A) shall ascertain from the assessment shall ascertain from the assessment records the precise date of the assessee’s last response under records the precise date of the assessee’s last response under records the precise date of the assessee’s last response under Section 148A(b) and thereafter adjudicate the question of Section 148A(b) and thereafter adjudicate the question of Section 148A(b) and thereafter adjudicate the question of limitation in accordance with law. limitation in accordance with law.
4.4 It is made clear that the It is made clear that the Ld. CIT(A) shall afford due shall afford due opportunity of being heard to the assessee and pass a speaking opportunity of being heard to the assessee and pass a speaking opportunity of being heard to the assessee and pass a speaking order upon such verification. order upon such verification.
4.5 In view of the restoration of the legal ground to the file of the In view of the restoration of the legal ground to the file of the In view of the restoration of the legal ground to the file of the Ld. CIT(A), we refrain from adjudicating upon the other grounds , we refrain from adjudicating upon the other grounds , we refrain from adjudicating upon the other grounds raised on the merits of the addition, which shall remain open. e merits of the addition, which shall remain open. e merits of the addition, which shall remain open.
In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for statistical purposes.