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Facts
The assessee's appeal was delayed by 10 days, and the condonation application was accepted. The core issue revolves around a notice issued under Section 148 of the Income Tax Act for the assessment year 2013-2014.
Held
The Tribunal held that notices issued under Section 148 between 01.04.2021 and 30.06.2021 are deemed to be show cause notices under Section 148A(b) of the new reassessment regime. Following the Supreme Court's decision in Rajeev Bansal, the notice and consequential assessment order are quashed.
Key Issues
Whether the notice issued under Section 148 of the Income Tax Act, after the introduction of the new reassessment regime, is valid and maintainable.
Sections Cited
148, 148A(b), 149, 151, Article 142 of the Constitution
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Income Tax Appellate Tribunal, CUTTACK BENCH CUTTACK
Before: SHRI GEORGE MATHAN & SHRI RAJESH KUMAR
(नििाारण वर्ा / Assessment Year : 2017-2018) Shree Prasad Jewellers, Vs ITO, Ward-1, Rourkela Sai Bihar, Sundargarh-770001 PAN No. :ABGFS 9081 E (अपीलार्थी /Appellant) (प्रत्यर्थी / Respondent) .. नििााररती की ओर से /Assessee by : Shri S.K.Agarwalla, AR राजस्व की ओर से /Revenue by : Shri Vijay Singh, Sr.DR सुनवाई की तारीख / Date of Hearing : 02/12/2025 घोषणा की तारीख/Date of Pronouncement : 02/12/2025 आदेश / O R D E R Per Bench : This is an appeal filed by the assessee against the order passed by the ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, dated 18.09.2025 for the assessment year 2013-2014.
At the outset, we found that the appeal of the assessee is delayed by 10 days. In this regard, the assessee has filed condonation of application along with affidavit stating sufficient reasons for condonation of delay, which are not found to be false. Ld. Sr. DR did not object to condone the delay. Accordingly, we condone the delay of 10 days delay and proceed to dispose off the appeal.
The ld. AR during the course of hearing submitted a chart stating therein the surviving period of notice issued u/s.148 of the Act and submitted that as per the decision of the Hon’ble Supreme Court in the case Ashish Agarwal, reported in 441 ITR 1 (SC) and in view of the Instruction issued by the CBDT in Instruction No.1/2022 requiring AO to treat notices issued under Section 148 between 01.04.2021 and 30.06.2021 as deemed show cause notices under Section 148A(b) of the new reassessment regime, the notice itself is liable to be quashed so also the assessment framed by the AO and confirmed by the ld. CIT(A) deserves to be quashed. The chart submitted by the ld.AR reads as follows :-
In reply, ld. Sr. DR vehemently supported the orders of the AO and ld. CIT(A).
We have considered the rival submissions. It is noticed that the amendment brought in by the Finance Act, 2021 has overhauled the reassessment procedure from 01.04.2021 onwards. The old regime stood repealed on 31.03.2021, and any action taken thereafter had to comply with the requirements of the new regime, including the issuance of notice under Section 148A(b) of the Act, passing of an order under Section 148A(d) of the Act, and only then issuance of notice under Section 148 of the Act. Accordingly, the Hon’ble Supreme Court in the case of Ashish Agarwal, Article 142 of the Constitution to temporarily validate notices issued under the old regime between 01.04.2021 and 30.06.2021 by treating them as show cause notices under Section 148A(b) of the Act. However, as per the subsequent decision of the Hon’ble supreme Court in the case of Rajeev Bansal, reported in [2024] 469 ITR 46 (SC), the notice issued by the AO in the case of the assessee for the year under consideration is also not maintainable. The Hon’ble Supreme Court in the case of Rajeev Bansal [2024] 469 ITR 46 (SC), wherein the Hon’ble Supreme Court has held as under :- G. Conclusions 114. In view of the above discussion, we conclude that: a. After 1 April 2021, the Income Tax Act has to be read along with the substituted provisions; b. TOLA will continue to apply to the Income Tax Act after 1 April 2021 if any action or proceeding specified under the substituted provisions of the Income Tax Act falls for completion between 20 March 2020 and 31 March 2021; c. Section 3(1) of TOLA overrides Section 149 of the Income Tax Act only to the extent of relaxing the time limit for issuance of a reassessment notice under Section 148; d. TOLA will extend the time limit for the grant of sanction by the authority specified under Section 151. The test to determine whether TOLA will apply to Section 151 of the new regime is this: if the time limit of three years from the end of an assessment year falls between 20 March 2020 and 31 March 2021, then the specified authority under Section 151(i) has extended time till 30 June 2021 to grant approval; e. In the case of Section 151 of the old regime, the test is: if the time limit of four years from the end of an assessment year falls between 20 March 2020 and 31 March 2021, then the specified authority under Section 151(2) has extended time till 31 March 2021 to grant approval;