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Facts
The assessee filed a return of income declaring NIL income, claiming exempt long-term capital gain. The assessment was reopened and additions were made treating capital gain as unexplained cash credit (Sec 68) and expenditure (Sec 69C). The CIT(A) dismissed the appeal, confirming the reassessment.
Held
The Tribunal held that the notice issued under Section 148 was barred by limitation because it was issued beyond the permissible 'surviving period' as per Supreme Court judgments. The reassessment proceedings were therefore without jurisdiction and liable to be quashed.
Key Issues
Whether the notice issued under section 148 is barred by limitation and whether the reassessment is vitiated due to absence of DIN on the notices.
Sections Cited
68, 69C, 147, 148, 148A, 144, 144B, 250, 253(5)
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Income Tax Appellate Tribunal, “A” BENCH MUMBAI
आदेश / ORDER
PER MAKARAND VASANT MAHADEOKAR, AM:
1. This appeal is directed against the order dated 27.08.2025 passed by the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] under section 250 of the Income-tax Act, 1961 [hereinafter referred to as “the Act”]for Assessment Year 2013–14, confirming Labdhi Logical Financial Solutions LLP the reassessment framed under section 147 read with section 144 read with section144B of the Act. Condonation of Delay 2. The Registry has noted that there is a delay of 21 days( as per affidavit 20 days) in filing the present appeal. The assessee has filed an application for condonation of delay supported by an affidavit of Shri Pravin Jain, partner of the assessee LLP.
We have carefully considered the contents of the affidavit and the material placed on record. In the affidavit, the deponent has stated that the impugned order of the CIT(A) was passed and received on 27.08.2025 on the e-mail ID of the assessee’s Chartered Accountant, namely parikhshailhit@yahoo.com, which was being operated by the said Chartered Accountant. The deponent has further averred that on 27.09.2025, the elder brother of the assessee’s Chartered Accountant, Shri Jitendra Parikh, expired. It is stated that since the deceased had no other male family member and his three daughters were married outside Ahmedabad, the Chartered Accountant was required to attend to the last rites and the related death ceremonies and procedural formalities, which continued up to 10.10.2025.It is further stated that thereafter, due to the tax audit season and the accumulated professional work arising from the said unfortunate event, the appeal could not be filed within the prescribed time, resulting in a delay of around 20 days. The deponent has specifically asserted that the delay was not on account of any Labdhi Logical Financial Solutions LLP mala fide intention or negligence, but was occasioned due to the genuine hardship faced in the circumstances narrated.
When the application for condonation was taken up, the learned Departmental Representative raised no objection to the prayer for condonation.
In our considered view, the explanation tendered by the assessee constitutes “sufficient cause” within the meaning of section 253(5) of the Act. The delay is not inordinate. The reason assigned is supported by a sworn affidavit, and the narrative discloses circumstances beyond the control of the assessee. Accordingly, having regard to the totality of facts and circumstances, and in view of the absence of any objection from the Revenue, we condone the delay of 21 days in filing the appeal and admit the appeal for adjudication on merits. Facts of the Case 6. The assessee filed its return of income declaring total income at Rs. NIL, claiming exempt long-term capital gain of Rs. 1,12,39,300/-. The assessment was reopened and reassessment order was passed under section 147 read with sections 144 and 144B of the Act, wherein the Assessing Officer treated the alleged long-term capital gain as unexplained cash credit under section 68 amounting to Rs. 1,21,14,250/- and further made addition of Rs. 6,05,712/- under section 69C. The CIT(A) dismissed the appeal and confirmed the reassessment and additions.
That the Ld. CIT(A) erred in law and in the facts of the case in confirming the order of the AO in reopening assessment u/s 147 of the act.
That the Ld. CIT(A) erred in law and in the facts of the case in confirming the order of the AO in reopening assessment u/s 147 of the act without following the due procedure mentioned in S. 148A(a) to (d) of the act.
3. That the Ld. CIT(A) erred in law and in the facts of the case in confirming the order of the AO in reopening assessment u/s 147 of the act without mentioning the DIN No in the notice u/s 148 of the act.
4. That the Ld. CIT(A) erred in law and in the facts of the case in confirming the order of the AO in reopening assessment u/s 147 of the act being barred by limitation.
5. That the Ld. CIT(A) erred in law and in the facts of the case in confirming the order of the AO in making an addition of Rs. 1,21,14,250/- as unexplained cash credit u/s 68 of the act.
That the Ld. CIT(A) erred in law and in the facts of the case in confirming the order of the AO in making an addition of Rs. 6,05,712/- as unexplained expenditure u/s 69C of the act.
Your appellant craves for leave to add, amend or alter all or any of the grounds before or during hearing of these cross objections. 8. Before us, the assessee has primarily raised legal grounds challenging the validity of reassessment on the issue of limitation and on the ground that notices under section 148 were issued without DIN.
The primary issue arising for adjudication is whether the notice issued under section 148 is barred by limitation in view of the judgments of the Hon’ble Supreme Court in Union of India v. Ashish Agarwal and Union of India v. Rajeev Bansal, and whether Labdhi Logical Financial Solutions LLP the reassessment is vitiated due to absence of DIN on the notices issued under section 148.
During the course of hearing before us, the learned Authorised Representative (AR) submitted that the original notice under section 148 was issued on 21.06.2021 and, as per the extension under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, the last date for issuance of such notice was 30.06.2021. It was submitted that, in view of the judgment of the Hon’ble Supreme Court in Union of India v. Ashish Agarwal (2022) 444 ITR 1 (SC), the said notice is deemed to be a notice under section 148A(b).
It was further submitted that, as per the subsequent judgment of the Hon’ble Supreme Court in Union of India v. Rajeev Bansal (2024) 469 ITR 46 (SC), only the “surviving period” as on 30.06.2021 is available to the Revenue for issuance of a fresh notice under section 148 after completion of the procedure under section 148A. The computation of limitation placed before us shows that only ten days were available to the Assessing Officer after the expiry of the reply period granted to the assessee.
It was submitted that the letter providing information/material under section 148A(b) was issued on 27.05.2022 and time up to 10.06.2022 was granted for reply. No reply was filed. Accordingly, the last date for issuance of fresh notice under section 148, applying the ratio of Rajeev Bansal and the decision of the Hon’ble Gujarat High Court in Dhanraj Labdhi Logical Financial Solutions LLP Govindram Kella, was 20.06.2022. However, the fresh notice under section 148 was issued only on 11.07.2022. Therefore, the notice is barred by limitation and the entire reassessment is void ab initio. It was also pointed out that both notices dated 21.06.2021 and 11.07.2022 were issued without DIN, in violation of CBDT instructions, rendering them invalid in law.
The learned Departmental Representative supported the orders of the lower authorities. It was submitted that reassessment proceedings were initiated on the basis of information regarding bogus long-term capital gain and that the assessee failed to cooperate.
We have carefully considered the rival submissions, perused the assessment order, the order of the CIT(A) and the material placed on record. The undisputed dates emerging from the record and from the computation placed before us are as under: Original notice under section 148 issued on: 21.06.2021 Last date for issuance of notice as per TOLA: 30.06.2021 Letter providing information under section 148A(b): 27.05.2022 Time allowed for reply: 14 days Last date for reply: 10.06.2022 Fresh notice under section 148 issued on: 11.07.2022
The Hon’ble Supreme Court in Union of India v. Ashish Agarwal (2022) 444 ITR 1 (SC) held that the notices issued Labdhi Logical Financial Solutions LLP between 01.04.2021 and 30.06.2021 under the old law shall be deemed to be show-cause notices under section 148A(b) of the Act. Subsequently, the Hon’ble Supreme Court in Union of India v. Rajeev Bansal (2024) 469 ITR 46 (SC) laid down the law regarding limitation and surviving period. The relevant extract of para 114 reads as under:
(g) The time during which the show-cause notices were deemed to be stayed is from the date of issuance of the deemed notice between April 1, 2021 and June 30, 2021 till the supply of relevant information and material by the Assessing Officers to the assessees in terms of the directions issued by this Court in Union of India v. Ashish Agarwal, and the period of two weeks allowed to the assessees to respond to the show-cause notices; and (h) The Assessing Officers were required to issue the reassessment notice under section 148 of the new regime within the time limit surviving under the Income-tax Act read with the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. All notices issued beyond the surviving period are time barred and liable to be set aside.
Applying the above legal position to the facts of the present case, it is evident that even after granting the period for reply up to 10.06.2022, the Assessing Officer could issue fresh notice under section 148 only within the surviving period of ten days thereafter. The last permissible date, therefore, was 20.06.2022. However, the fresh notice was issued only on 11.07.2022, which is clearly beyond the permissible period. Thus, respectfully following the judgments of the Hon’ble Supreme Court in Ashish Agarwal and Rajeev Bansal and other judicial precedents relied upon by the assessee, we hold that the notice issued under Labdhi Logical Financial Solutions LLP section 148 is barred by limitation and the assumption of jurisdiction under section 147 is invalid in law.
In view of our finding on limitation, we do not consider it necessary to adjudicate the other grounds on merits.
Additionally, it is also on record that the notices dated 21.06.2021 and 11.07.2022 were issued without DIN. The assessee has raised this as an independent legal infirmity. Since we have already held the reassessment to be void on the ground of limitation, we leave this issue open.
In our considered view, the Assessing Officer has assumed jurisdiction under section 147 on the basis of a notice under section 148 which is barred by limitation. Consequently, the entire reassessment proceedings are without jurisdiction and liable to be quashed.
Accordingly, the reassessment order passed under section 147 read with section 144B and the order of the CIT(A) are hereby quashed. Since the reassessment itself is quashed, the additions made under sections 68 and 69C do not survive and are not adjudicated on merits.
In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 04.02.2026.