Loading judgment…
Facts
The Revenue challenged the quashing of proceedings under Section 148 of the Income-tax Act for AY 2014-15 and AY 2015-16. The assessee argued that the notices issued under Section 148 were time-barred. The Supreme Court's decisions in 'Rajeev Bansal' and 'Ashish Agarwal' were central to the arguments.
Held
The Tribunal held that for AY 2015-16, the notices were beyond jurisdiction due to the Revenue's concession before the Supreme Court. For AY 2014-15, the notice issued on 28.07.2022 was found to be beyond the limitation period, calculated based on the 'surviving period' after considering the extension by TOLA and the assessee's reply.
Key Issues
Whether the notices issued under Section 148 of the Income-tax Act for AY 2014-15 and AY 2015-16 were barred by limitation.
Sections Cited
148, Income-tax Act, 1961
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI ‘E’ BENCH,
Before: SHRI CHALLA NAGENDRA PRASAD, & SHRI NAVEEN CHANDRA
The above captioned bunch of appeals by the Revenue and Cross Objections by the assessee are preferred against the separate orders of the ld. CIT(A) Delhi dated 05.07.2024 for A.Ys 2014-15 and 2015-16 respectively.
Since the underlying appeals and cross objections were heard together and the facts in issues are identical, both these appeals and cross objections are being disposed off by this common order for the sake of convenience and brevity, though the quantum may differ.
The Revenue has challenged the quashing of the proceedings u/s 148 of the Income-tax Act, 1961 [the Act, for short] for AY 2014-15 and AY 2015-16. Challenge before us therefore, is that the assessment order so framed on the basis of notice u/s 148 which is barred by limitation is non- est.
The ld. DR, on the other hand, relied on the orders of the authorities below.
Page 2 of 8 [A.Y. 2015-16] CO No. 243/DEL/2025 CO No. 244/DEL/2025 Dy. C.I.T vs.LT Foods Limited 5. At the very outset, the ld. counsel for the assessee vehemently submitted that the issue raised in both these appeals is covered in favour of the assessee by the Hon’ble Supreme Court in the case of Rajeev Bansal 167 taxmann.com 70.
Brief facts of the case are that for AY 2014-15, notice u/s 148 of the Income-tax Act, 1961 [the Act, for short] was issued under the unamended Act to the assessee on 03.06.2021. This notice was considered as show cause notice in view of the decision of the Hon'ble Supreme Court in the case of Union of India Vs. Ashish Agarwal reported in 444 ITR 1 (SC) dated 04.05.2022. Finally, notice u/s 148 of the Act for AY 2014-15 was issued on 28.07.2022. The bone of contention is whether the subsequent notice issued u/s 148 of the Act on 28.07.2022 is to be treated as time barred or not in the light of decision of Hon'ble Supreme Court in the case of Union of India Vs. Rajeev Bansal reported in 469 ITR 46 (SC).
Similarly for AY 2015-16, original notice u/s 148 of the Income-tax Act, 1961 [the Act, for short] was issued under the unamended Act to the assessee on 30.06.2021. In view of the decision of the Hon'ble Supreme Court in the case of Union of India Vs. Ashish Agarwal (supra), the subsequent notice u/s 148 of the Act was issued on 28.07.2022.
Page 3 of 8 [A.Y. 2015-16] CO No. 243/DEL/2025 CO No. 244/DEL/2025 Dy. C.I.T vs.LT Foods Limited 8. The ld. counsel for the assessee vehemently contended that the notice u/s 148 of the Act dated 28.07.2022, for the AY 2014-15, has been issued after the ‘surviving period’ as explained by the Hon'ble Supreme Court in the case of Rajeev Bansal 167 taxmann.com 70. The ld. counsel for the assessee submitted that fresh notice u/s 148 of the Act could have been issued only upto 17.07.2022 and therefore the notice is barred by limitation.
With respect to the notice u/s 148 for AY 2015-16, the ld AR submitted that the said AY cannot be reopened in view of the fact that the Revenue conceded before the Supreme Court in the case of Rajeev Bansal (supra) that all notices issued for AY 2015-16 will have to be dropped. The ld AR placed reliance on the following decisions:
UOI v. Rajeev Bansal [2024] 469 ITR 46 (SC) Ram Balram Buildhome (P.) Ltd. v. ITO [2025] 477 ITR 133 (Del.) ADM Agro Industries Latur and Vizag (P.) Ltd. v. ACIT [2025] 174 taxmann.com 725 (Del.) ITO v. Shri Pawan Goyal: (Del. Trib.)
The ld. DR, on the other hand, relied on the orders of the authorities below.
We have heard the rival submissions and have perused the relevant material on record. On the issue of limitation for issuance of notice u/s 148 Page 4 of 8 [A.Y. 2015-16] CO No. 243/DEL/2025 CO No. 244/DEL/2025 Dy. C.I.T vs.LT Foods Limited for AY 2015-16, we find that the hon’ble Supreme Court in Deepak Steel & Power Ltd. vs. CBDT & Ors., (supra), referring to its decision in Union of India and ors. v. Rajeev Bansal, reported in 2024 SCC OnLine SC 2693, more particularly, paragraph 19(f), observed that:-
19. (f) The Revenue concedes that for the assessment year 2015- 2016, 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.
As the revenue made a concession in the aforesaid decision that is for the assessment year 2015-2016, 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). 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.
6. In view of the aforesaid, in such circumstances referred to above the original writ petition nos. 2446 of 2023, 2543 of 2023 and 2544 of 2023 respectively filed before the High Court of Orissa at Cuttack stands allowed."
In the light of the admission made by the Revenue before the Hon'ble Supreme Court, the notice u/s 148 for AY 2015-16 in any case, is to be Page 5 of 8 [A.Y. 2015-16] CO No. 243/DEL/2025 CO No. 244/DEL/2025 Dy. C.I.T vs.LT Foods Limited dropped as beyond jurisdiction. We order accordingly and we also quash the assessment order emanating out of such notice u/s 148 of the Act. The grounds 1.1 to 1.3 of the assessee in its CO for AY 2015-16 is allowed.
Admittedly, for the AY 2014-15 in the instant case, the notice u/s 148 of the Act was issued on 03.06.2021 giving a surviving period, calculated according to the Rajeev Bansal decision, from date of issuance of deemed show cause notice till expiry of period as extended by TOLA (i.e., from 03.06.2021 to 30.06.2021), of 27 days. In response to the SCN, the assessee filed its reply on 20.06.2022 which means the AO had to issue notice u/s 148 within 27 days of filing of reply by the assessee i.e., by 17.07.2022.
The AO however, issued notice u/s 148 on 28.07.2022. In such factual matrix of the instant case, the impugned notice u/s 148 being issued after the limitation period, cannot but be considered as barred by limitation and is liable to be quashed. We order accordingly and we also quash the assessment order emanating out of such notice u/s 148 of the Act. The grounds 1.1 to 1.3 of the assessee in its CO for AY 2014-15 is allowed.
Since the notices u/s 148 are quashed, no separate adjudication is made on other grounds. Further, as the assessment order has been quashed, all the issues raised by the Revenue and the assessee in their
Page 6 of 8 [A.Y. 2015-16] CO No. 243/DEL/2025 CO No. 244/DEL/2025 Dy. C.I.T vs.LT Foods Limited appeal/CO which deal with the merits of the case becomes academic and infructuous and require no separate adjudication.
In the result, appeal of the assessee in and 15.
4012/DEL/2024 are dismissed whereas the cross objections of the assessee in CO Nos. 243 and 244/DEL/2025 are allowed.
The order is pronounced in the open court on 15.01.2026.