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Facts
The appeals were filed by the Revenue and assessee against the orders of the CIT(A) for AYs 2014-15 and 2015-16. The assessee filed cross objections challenging the validity of the reassessment proceedings initiated under Section 148 of the Income Tax Act, 1961, alleging they were time-barred. The Revenue challenged the deletion of additions by the CIT(A).
Held
The Tribunal held that the notices issued under Section 148 of the Act were beyond the period of limitation prescribed by Section 149(1) of the Act, especially considering the period of six years for reopening assessments in certain cases. The Tribunal relied on the Supreme Court's decision in Union of India vs. Rajeev Bansal, which clarified the position on the validity and limitation of such notices.
Key Issues
Whether the notices issued under Section 148 of the Income Tax Act, 1961, for reassessment for AYs 2014-15 and 2015-16 were barred by limitation.
Sections Cited
Section 148, Section 148A, Section 147, Section 149(1)(b), Section 69C, Section 153C, Section 132(1), Section 139(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “D” BENCH, KOLKATA
Before: SHRI RAJESH KUMAR, AM & SHRI PRADIP KUMAR CHOUBEY, JM
These are cross appeals preferred by the assessee & Revenue against the orders of the Commissioner of Income-tax (Appeals), Kolkata-20 (hereinafter referred to as the “Ld. CIT(A)”] even dated 06.05.2025 for the AYs 2014-15 & 2015-16.
A.Y. 2014- CO 2/Kol/2026 3. The Revenue has challenged the deletion of addition by the ld. CIT (A) as made by the ld. AO in respect of unsubstantiated loss on stock option of ₹1,22,73,405/-, unexplained expenditure u/s 69C of ₹2,45,478/-, unsubstantiated loss of penny stock of ₹2,34,41,467/- and unexplained expenditure of ₹4,68,830/- as made by the ld. AO.
The assessee by way of Cross Objection has challenged the notice issued u/s 148 of the Act as well as the assessment framed to be barred by limitation. Since, the assessee has raised legal issue in the cross objection, we are inclined to decide the grounds raised in CO.
4.1. The facts in brief are that the assessee filed the return of income on 30.11.2014, declaring total income at ₹5,81,240/-. The assessee is a non-banking financial company engaged in the business of providing loans and trading in shares. The assessment u/s 143(3) of the Act was framed in the instant case vide order dated 26.12.2016. Thereafter,
4.2. The ld. AR vehemently submitted before us that the notice u/s 148 of the Act is barred by limitation on 31.03.2021, in terms of Provisions of Section 149(1)(b) of the Act. The ld. AR submitted that in this case the assessment year involved was A.Y. 2014-15 and since, the income which was alleged to have escaped the assessment was more than 1 lacs. Therefore, notice u/s 148 could be issued within a period of six years from the end of the relevant assessment year. The ld. AR therefore prayed that since the notice was issued beyond the limitation period, i.e., on 30.06.2021, therefore, the benefit of TOLA is not available. The ld. AR submitted that the benefit of TOLA is available if the limitation expires between 01.04.2021 to 30.06.2021, within which the TOLA is applicable. However, in this case the limitation has already expired. The ld. Counsel for the assessee submitted that the notice u/s 148 as well as the assessment framed is consequential. The ld. AR in defense of his argument relied on the decision of the co-ordinate bench in case of Samrat Finvestors Private Limited Vs. ITO in to 1038/KOL/2025 vide order dated 16.10.2025, the operative part of the decision read as under:-
“030. After hearing the rival contentions and perusing the materials available on record, we find that the assessment in this case was framed u/s 143(3) of the Act vide order dated 31.12.2016. Thereafter, the notice u/s 148 of the Act was issued on 28.04.2021 and ITR was filed on 07.05.2021. Thereafter, the assessee filed the objection on the validity of notice issued u/s 148 of the Act, challenging the same on the various grounds.
Coming to Revenue’s appeal, since, we have already allowed the Cross Objection of the assessee by quashing the assessment framed by the ld. AO, the appeal of the Revenue becomes infructuous and hence, dismissed.
The Cross Objection of the assessee is allowed and the appeal of the Revenue is dismissed.
A.Y. 2015- CO 3/Kol/2026 7. The Revenue has challenged the order of the ld. CIT (A) deleting the additions as made by the ld. AO in respect of trading loss claimed by the assessee in the guise of Currency Option transactions.
The assessee by way of Cross Objection has challenged the notice issued u/s 148 of the Act in respect of A.Y. 2015-16, being time barred by limitation in consonance with the decision of the Hon'ble Apex Court in the case of Union of India and other Vs. Rajeev Bansal [2024] 469 ITR 46 (SC), dated 03.10.2024. Since, the assessee has raised legal issue in the cross objection, we are inclined to decide the CO first.
8.1. The facts in brief are that the assessee filed its original return of income on 30.09.2015 showing total income at Rs. 6,51,140/-. Later on, Search and Seizure operation u/s. 132(1) of the Act was conducted on 03.07.2018 at the MLA Group of companies and on subsequent
8.2. In the appellate proceedings, the ld. CIT (A) allowed the appeal of the assessee.
8.3. After hearing the rival contentions and perusing the materials available on record, we find that the case was selected for re- assessment u/s 148 of the Act on 29/04/2022 by treating the notice issued on 30/06/2021 u/s 148 as deemed notice issued u/s 148A(b) of the Act, which is beyond six years. Since the period of six years expired on 31.03.2022, although the original assessment made u/s 153C of the Act on 30.04.2021 and assessee has disclosed all the facts before the ld. AO at the time of assessment. The Hon’ble Supreme Court in the case of Rajeev Bansal (supra) has categorically settled the legal position on the validity and the limitation of such notices. Therefore, the notice u/s 148 of the Act was issued beyond the time period of six years, therefore, the reassessment proceedings are not valid. Considering the facts of the assessee’s case in the light of the
Coming to Revenue’s appeal, since, we have already allowed the Cross Objection of the assessee for A.Y. 2015-16 by quashing the assessment framed by the ld. AO, the appeal of the Revenue become infructuous and hence, dismissed.
The Cross Objection of the assessee is allowed and the appeal of the Revenue is dismissed.
To sum up, both the cross objections of the assessee’s appeal are allowed and the appeals of the Revenue are dismissed.
Order pronounced in the open court on 26.02.2026.