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Facts
The assessee filed an appeal against the reassessment order for AY 2013-14, challenging the notice issued under Section 148 of the Income Tax Act as being barred by limitation. The notice was issued after considering relaxations due to the COVID-19 pandemic and relevant Supreme Court decisions.
Held
The Tribunal found that the last date for issuing the notice under Section 148 of the Act had expired on 01.07.2022. Since the notice was ultimately issued on 20.07.2022, it was beyond the surviving period and therefore barred by limitation, rendering the assessment invalid.
Key Issues
Whether the reassessment notice issued under Section 148 was time-barred, considering the impact of TOLA, the Ashish Agarwal and Rajeev Bansal judgments, and the calculation of the surviving period for reassessment proceedings.
Sections Cited
147, 148, 148A, 149, 151
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Income Tax Appellate Tribunal, “D” BENCH, KOLKATA
Before: SHRI RAJESH KUMAR, AM & SHRI PRADIP KUMAR CHOUBEY, JM
This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 11.06.2025 for the AY 2013-14.
In ground no.1 the assessee has challenged the notice issued u/s 148 of the Act and re-assessment proceedings to be barred by limitation in view of the decision of 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 and therefore, the notice u/s 148 of the Act as well as the assessment framed by the ld. AO are nullity and bad in law.
The facts in brief are that the notice u/s 148 of the Act was issued on 19.06.2021. The assessee requested the ld. AO/JAO on 06.01.2022
The ld. AR vehemently argued that the notice u/s 148 of the Act was issued beyond surviving period i.e. 01.07.2022 and therefore in terms of Para no.114 of the Hon'ble Apex Court decision in Union of India Vs. Rajeev Bansal (supra), the notice is barred by limitations and accordingly, the assessment framed by the ld. AO is also nullity and bad in law and may kindly be quashed.
The ld. DR on the other hand, vehemently submitted that the notice is not barred by limitation and it was validly issued on 30.07.2022.
After hearing the rival contentions and perusing the materials available on record, we find that in this case the assessment year is 2013-14 and the last day for issue of notice in terms of Provisions of Section 149(1)(b) of the Act on 31.03.2020. We note that the notice was issued on 19.06.2021. We further note that due to covid pandemic Other laws (relaxation and amendment of certain provisions) Act, 2020 (TOLA) was brought out, which overrides the Income Tax Act to the extent of relaxing time limit for issuance of reassessment notices,
“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; 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;
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 20.01.2026.
Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 20.01.2026 Sudip Sarkar, Sr.PS Copy of the Order forwarded to: