SANKAR PATRO,GANJAM vs. INCOME TAX OFFICER, WARD-1, BERHAMPUR

Ld. AR also drew our attention to the decision of the coordinate bench of the Tribunal in the case of Kolte Patil Integrated Townships Limited, passed in and 2011/PUN/2024, order dated 10.03.2025 and submitted that the coordinate bench of the Tribunal in para 45 has held that in view of the decision of the Hon’ble Supreme Court in the case of Rajeev Bansal the notice issued u/s.148 of the Act for A.Y.2016-2017 by 26.06.2022 is barred by limitation. The relevant observations of the Tribunal in para 45 reads as under :- Therefore, in view of the decision of the Hon'ble Supreme Court in the case of Ashish Agarwal (supra), it is clear that the time between the issue of original notice u/s 148 under the old regime and the time upto 30.06.2021 is the time limit available which needs to be added to the date on which the reply of the assessee was received. The Hon'ble Supreme Court has referred to this time limit as the surviving time limit available. Applying the same principle as laid down by Hon'ble Supreme Court in the case of Rajeev Bansal, for A.Y. 2014- 15, the Assessing Officer should have issued notice u/s 148 by 13.06.2022 and for A.Y. 2016-17 by 26.06.2022. However, for both the assessment years, the Assessing Officer has issued notice u/s 148 subsequent to those dates i.e. 25.07.2022 and 26.07.2022 respectively. Therefore, the notices issued u/s 148 in the new regime are barred by limitation for both years. We, therefore, hold that the notice issued u/s 148 of the Act being barred by limitation, such re- assessment proceedings are not in accordance with law and have to be quashed.

In reply, ld. Sr. DR vehemently supported the orders of the AO and ld. CIT(A).

We have considered the rival submissions. A perusal of the assessment order shows that the AO has issued notice u/s.148 of the Act on 23.08.2022, however, the time available with the AO to issue notice u/s.148 of the Act under the new regime in compliance to the decision of Hon’ble Supreme Court in the case of Rajeev Bansal was 11.08.2022. Thus, it is clear that the notice issued u/s.148 of the Act by the AO on 23.08.2022 under new regime is barred by 12 days. This issue is squarely covered by the decision of 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 5 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; f. The directions in Ashish Agarwal (supra) will extend to all the ninety thousand reassessment notices issued under the old regime during the period 1 April 2021 and 30 June 2021; 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 1 April 2021 and 30 June 2021 till the supply of relevant information and material by the assessing officers to the assesses in terms of the directions issued by this Court in Ashish Agarwal (supra), and the period of two weeks allowed to the assesses 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 TOLA. All notices issued beyond the surviving period are time barred and liable to be set aside; 7. Respectfully following the decision of the Hon’ble Supreme Court in the case of Rajeev Bansal, referred to supra, it is held that the notice u/s.148 of the Act dated 23.08.2022 and in consequence thereof the assessment order dated 01.05.2023 framed by the AO is hereby quashed.