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Facts
The assessee company is engaged in manufacturing M.S. Pipes and Galvanized Pipes. The appeals are against orders concerning AYs 2011-12 and 2015-16. For AY 2011-12, the addition of ₹42,61,133 was made by treating a sale to M/s Ambika Ispat Udyog as an unexplained cash credit. For AY 2015-16, the reassessment proceedings were challenged as time-barred.
Held
For AY 2011-12, the CIT(A)'s order was set aside and the issue was remanded to the AO to allow the assessee an opportunity to furnish details of transportation expenses. For AY 2015-16, the reassessment notice was held to be barred by limitation, and the assessment order was quashed.
Key Issues
Whether the addition made under Section 68 for unexplained cash credit was justified, and whether the reassessment proceedings for AY 2015-16 were valid and not barred by limitation.
Sections Cited
Section 68, Section 147, Section 144B, Section 148, Section 148A, Section 149, Section 153A, Section 115JB
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Income Tax Appellate Tribunal, KOLKATA ‘C’ BENCH, KOLKATA
Before: SHRI GEORGE MATHAN & SHRI RAKESH MISHRA
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
These appeals filed by the assessee are against the separate orders of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AYs 2011-12 and 2015-16 dated 07.01.2025. Since both the appeals were heard together, they are being decided vide this common order for the sake of convenience and brevity
The assessee is in appeal before the Tribunal raising the following grounds of appeal: I. ITA No.: 179/KOL/2025; AY 2011-12:
“1. That the Order passed u/s 250 is bad in law as well as on facts of the case.
The Hon'ble Commissioner of Income Tax (Appeals) erred both in law and on facts by confirming the addition made by the Learned Assessing Officer, who treated the sale amounting to ₹42,61,133 to M/s Ambika Ispat Udyog as an unexplained cash credit under Section 68 of the Income Tax Act, ITA Nos.: 179 & 180/KOL/2025 AYs: 2011-12 & 2015-16 Nezone Tubes Limited. despite the fact that the said amount had already been declared as a sale in the appellant's accounts, leading to a double addition.
The Hon'ble Commissioner of Income Tax (Appeals) erred both in law and on facts by confirming the addition made by the Learned Assessing Officer, who treated the 3 sale of ₹42,61,133 to M/s Ambika Ispat Udyog as an accommodation entry, while simultaneously not rejecting the purchase related to the aforesaid sale, thereby leading to an inconsistent and erroneous conclusion.
That the appellant craves to leave, add, amend or adduce any of the grounds of appeal during the course of appellate proceedings.” II. ITA No.: 180/KOL/2025; AY 2015-16:
“1. That the Order passed u/s 250 is bad in law as well as on facts of the case.
The Hon'ble Commissioner of Income Tax (Appeals) erred both in law and on facts by setting aside the assessment to the Learned Assessing Officer for fresh assessment under the powers of Section 251(1)(a) of the Income Tax Act, 1961, in respect of an order passed under Section 147 read with Section 144B and not under Section 144 of the Act.
The Hon'ble Commissioner of Income Tax (Appeals) erred both in law and on facts by passing the order on 07/01/2025 at 11:26 IST, prior to the expiry of the 3 stipulated time period provided in the notice for submissions, thereby violating the principles of natural justice and denying a reasonable opportunity to be heard.
The Hon'ble Commissioner of Income Tax (Appeals) erred both in law and on facts by failing to adjudicate the ground that the addition made by the Learned Assessing Officer was without furnishing any information or supporting documents to the appellant, thereby violating the principles of natural justice.
The Hon'ble Commissioner of Income Tax (Appeals) erred both in law and on facts by failing to adjudicate the ground that the Learned Assessing Officer passed the assessment order entirely based on third-party information, without conducting any independent inquiry or verification as mandated under Section 148A of the Income Tax Act, 1961, thereby violating the statutory requirements and principles of natural justice.
The Hon'ble Commissioner of Income Tax (Appeals) erred both in law and on facts by failing to adjudicate the 6 ground that the Learned Assessing Officer passed the assessment order by erroneously applying the provisions of Section 149(1) of the Income Tax Act, 1961. ITA Nos.: 179 & 180/KOL/2025 AYs: 2011-12 & 2015-16 Nezone Tubes Limited.
The Hon'ble Commissioner of Income Tax (Appeals) erred both in law and on facts by failing to adjudicate the 7 ground that the Learned Assessing Officer passed the order without considering the submissions filed by the appellant, in violation of the principles of natural justice.
The Hon'ble Commissioner of Income Tax (Appeals) erred both in law and on facts by failing to adjudicate the ground that the Learned Assessing Officer passed the assessment order based solely on the statement of Shri Dilip Kumar Gupta, who was not made available for cross-examination, thereby rendering his statement devoid of evidentiary value and in violation of the principles of natural justice.
The Hon'ble Commissioner of Income Tax (Appeals) erred both in law and on facts by failing to adjudicate the ground that the Learned Assessing Officer issued a show cause notice on issues that were different from those mentioned in the reasons recorded, thereby violating the procedural requirements of the Income Tax Act.
The Hon'ble Commissioner of Income Tax (Appeals) erred both in law and on facts by failing to adjudicate the ground that the Learned Assessing Officer passed a non-speaking order, devoid of any reasoning, thereby failing to comply with the statutory requirement of providing a reasoned order.
The Hon'ble Commissioner of Income Tax (Appeals) erred both in law and on facts by failing to adjudicate the ground that the Learned Assessing Officer erroneously treated the amount of ₹1,15,00,000 received from M/s Primary Investment Consultants Pvt. Ltd. as a loan, and subsequently classified it as an unexplained cash credit under Section 68 of the Income Tax Act, 1961. 12. The Hon'ble Commissioner of Income Tax (Appeals) erred both in law and on facts by failing to adjudicate the ground that the Learned Assessing Officer treated the amount of ₹75,00,000 received from M/s Mangal Chand Property & Investment Pvt. Ltd. as a loan, and erroneously classified it as an unexplained cash credit under Section 68 of the Income Tax Act, 1961. 13. That the appellant craves to leave, add, amend or 13 adduce any of the grounds of appeal during the course of appellate proceedings.” A. We shall first take up ITA No. 179/KOL/2025 for AY 2011-12 for adjudication.
Brief facts of the case are that the assessee company was engaged in the business of manufacture of M.S. Pipes and Galvanized Pipes ITA Nos.: 179 & 180/KOL/2025 AYs: 2011-12 & 2015-16 Nezone Tubes Limited. during the year and had filed its return of income for the AY 2011-12 on 23.09.2011 showing total income of ₹8,79,96,137/- under the normal provision. A search and seizure action was conducted in the case of the assessee on 01.08.2012 and notice u/s 153A of the Act was issued. In response to the same, the assessee filed its return of income on 23.08.2013 declaring total income of ₹8,75,36,416/-. An assessment u/s 153A/143(3) of the Act was completed on 29.08.2014 at the returned income of the assessee at ₹8,75,36,420/-. The assessment was reopened on the basis of information received from the Investigation Wing that a sum of ₹42,61,133/- was received from Ambika Ispat Udyog as accommodation entry without delivering any goods. During the course of the reassessment proceedings, the Assessing Officer (hereinafter referred to as Ld. 'AO') issued statutory notices to the assessee. The assessee objected to the reasons and the guideline of the Hon'ble Supreme Court in the case of GKN Drive Shafts (India) Limited vs. DCIT (2003) 259 ITR 19 (SC) was considered and after considering the response of the assessee to the notices issued, a sum of ₹42,61,133/- was added and the total income was assessed at ₹9,17,97,553/-. The reasons for making the addition are as under: “3.1 Information has been received from ADIT (Inv.), Unit 5, Kolkata vide Letter No.ADIT (Inv.)/U-5/Kol/10011802/2017-18/7488 dated 05- 09/03/2018 regarding fund remittances by various entities through a number of bank accounts. High RTGS credits were observed in the account bearing account no. 0459083000000005. The account number is in the name of Ambika Ispat Udyog. On enquiry/investigation, it was observed that the account under suspicion has mainly credited by way of transfers, RTGS, NEFT and clearings and the fund from the account has been further debited to many accounts. Notice u/s 131 of the Income Tax Act 1961 was issued to the assessee viz Ambika Ispat Udyog on 24.01.2018 but the same was returned back with the remarks as "Co. Abolished". The amounts were transferred after routing through different layers finally deposited an ITA Nos.: 179 & 180/KOL/2025 AYs: 2011-12 & 2015-16 Nezone Tubes Limited. amount of Rs. 42,61,133/- in the A/c of the assessee company i.e. Nezone Tubes Ltd. in the F.Y. 2010-11. 3.2 The assessee was asked vide notice under section 142(1) to furnish the nature of transaction with the alleged assessee M/s Ambika Ispat Udyog during the year. The assessee company made compliance of the notice under section 142(1) on 21.12.2018 that the assessee company had sold its products to M/s Ambika Ispat Udyog during the year. In relation to the his explanation the assessee furnished the bank statement where the sums were credited and ledger copy and bills issued to the M/s Ambika Ispat Udyog. However, the assessee could not furnish in his support the delivery challan, road challan, details of movement in goods and purchase order received by the assessee regarding the alleged sale. Therefore, in the absence of adequate evidence it cannot be concluded that this sale was actually made during the year and it was not an accommodation entry.
3 As per section 68 of the I.T. Act, 1961 where any sum is found credited in the books of an assessee maintained nature and source thereof or the explanation offered by him is not, in the opinion of the AO, satisfactory, the sum so credited may be charged to income tax as the income of the assessee of that previous year". In ordinary circumstances, assessee's burden is confined to prove creditworthiness of creditor with reference to transaction between assessee and creditor. It was so held in Nemi Chand Kothari v. CIT [2004] 136 Taxman 213 (Gau.), that a harmonious construction of Section 106 of the Evidence Act and Section 68 of the Income-tax Act will be that though apart from establishing the identity of the creditor, the assessee must establish the genuineness of the transaction as well as the creditworthiness of his creditor, the burden of the assessee to prove the genuineness of the transactions as well as the creditworthiness of the creditor must remain confined to the transactions, which have taken place between the assessee and the creditor. In this case, the assessee failed to discharge his onus of proofing the creditworthiness and genuineness of the transaction. Therefore, it can be concluded that this transaction was in guise of accommodation loan entry of Rs.42,61,133/- from M/s Ambika Ispat Udyog and is treated as bogus sale and sums credited in the assessee account are treated as unexplained cash credit under section 68 of the I.T. Act and added to the total income of the assessee during the year.”
Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A), who issued notices for hearing and after considering the assessment order and the response/written submission ITA Nos.: 179 & 180/KOL/2025 AYs: 2011-12 & 2015-16 Nezone Tubes Limited. of the assessee and also after considering the statement of facts and the judicial pronouncements relied upon by the assessee, held as under:
“9. Decision on Grounds of Appeal: During the appeal proceedings, Assessment order, Grounds of appeal, Facts of the case and submission filed by the appellant are carefully scrutinized by the under signed. Ground 01: In this ground of appeal the appellant objected the assumption of juri iction by the Ld. AO in framing the assessment u/s 147 of the Income Tax Act 1961 and without complying with mandatory conditions of section 147 to 151 of the Income Tax Act, 1961. The contention of the appellant has been considered. I have gone through the facts and found that the proceedings against appellant were opened u/s 147 of the Income Tax Act, 1961 after obtaining approval from the competent authority. During the course of proceedings, the Assessing Officer issued the notice u/s 148 on 31.03.2018 and duly served upon appellant through speed post and Email to the appellant. In response to the same, appellant has filed the return of Income. However, the Assessing Officer issued notice u/s 142(1) on various dates. In response to the same, the appellant has filed partially details. In view of the discussion, it is pertinent to note that the Assessing Officer has granted ample opportunities for proving the supporting documents. However, the appellant has furnished partially reply to the notices as discussed supra. I have carefully considered appellant submission. After careful perusal of assessment order, it is seen that the reopening is based on cogent evidence and clear facts brought out by the Assessing Officer while recording satisfaction for issuance of notices u/s 148. Accordingly, I do not see any reason to intervene at this juncture as I don't see any anomaly in initiation of assessment proceedings u/s 148 initiated by the Assessing Officer which is based on specific information in the case of the appellant. Therefore, in my considered opinion, the AO is justified in rejecting the objections of the Appellant. Hence, the Ground is noted as disallowed. Ground 02: In this grounds of appeal the appellant objected the addition made by the Assessing officer is Rs. 42,61,133/- for the A.Y. 2011-12. The contention of the appellant has been considered. I have gone through the facts and found that the appellant company is engaged in the business of manufacturing M S Pipes and Galvanized pipes and filed its return of income on 23.09.2011 declaring total income at Rs. 8,79,96,137/- for the A.Y. 2011- 12 and same was processed u/s 143(1). Subsequently a search action was conducted in the case of the appellant on 01.08.2012 and notice u/s 153A was issued. In response to the same the appellant filed his return of income on 23.08.2013 declaring total income of Rs. 8,75,36,416/-. Assessment u/s ITA Nos.: 179 & 180/KOL/2025 AYs: 2011-12 & 2015-16 Nezone Tubes Limited. 153A/143(3) was completed on 29.08.2014 at the returned income of the assessee. Subsequently, the case of the appellant company was reopened on 31.03.2018 on the basis of information received from the investigation wing that a sum of Rs. 42,61,133/- received from Ambika Ispat Udyog as accommodation entry without delivered any goods. The assessing officer passed the assessment order on 30.12.2018 determined total income of Rs. 9,17,97,553/- and stated that the assessee failed to discharge his onus of proofing the creditworthiness of the transaction and same was added by the assessing officer to the total income of the assessee for the said year. During the course of appeal proceedings, the appellant filed the submission and same has been perused carefully. It is pertinent to note that the appellant received a sum of Rs. 42,61,133/- in its bank account from Ambika Ispat Udyog for the F.Y. 2010-11. On enquiry conducted by the investigation wing, it was observed by the DDIT that the account under suspicious has mainly credit by way of transfer RTGS, NEFT and clearing, the fund from the account has been further debited to many accounts. The amount were transferred after routing through different layers finally deposited an amount of Rs. 42,61,133/- in the appellant bank account for the F.Y. 2010-11. One of the most common ways to reduce profits is by inflating the purchase/ raw material cost, expenses like labour charges, entertainment expenses and commission. In such cases, bogus bills may be prepared to show inflated expenses in the books. It involves obtaining bogus or inflated invoices from the so called 'bill masters', who make bogus vouchers and charge nominal commission for this facility. Bogus Purchases: Bogus purchase entries are made in the books of account for purchases made, where in fact, no actual purchases have been made by the purchaser of goods. Bogus purchases invariably also provoke bogus sales as well in most of the cases. They are merely transactions on paper with no exchange of goods. In case where an assessee is called upon to establish the genuineness of purchase transactions recorded in its books of account, requisite evidences have to be brought on record to establish authenticity of purchases. Whether a transaction of purchase is proved or not is a question of fact and the primary onus is on the assessee to prove the genuineness of purchases. The assessee may have to furnish the below mentioned documentary evidences to establish the factum of purchases:
Purchase invoices, purchase order, E-way bill, along with photographic evidence of the goods acquired. ITA Nos.: 179 & 180/KOL/2025 AYs: 2011-12 & 2015-16 Nezone Tubes Limited.
Confirmation from the seller of goods stating that the goods are sold by him.
An inward register and outward register maintained at register premises, containing details such as dates, supplier name, VAT numbers, taxable values, VAT amounts, weighing receipts, the time of goods receipt in the sites, signatures of transporters, vehicle numbers and other pertinent information.
Certified invoice by site manager such as date and time of goods receipt in the sites, signature of manager.
Goods receipts notes issued by the transporting party for the goods.
Freight charges made.
Detailed stock register displaying the quantities of materials purchased.
The movement of goods from vendor's destination to particular sites destination along with substantial supporting evidences.
Tallying the Purchase Value and Purchase Quantity as per books of account with the VAT returns filed with the authority.
Quality check reports for any discount claimed due to quality differences, records of cash discounts, if any, availed etc. Thus, when Vendors make payments to these suppliers through Banking Channels then the suppliers retain the VAT amount, charge some commission and give the balance amount back in cash to him. In respect of the same, the supplier provides the VAT invoice and generates E-way bill. However, no actual exchange of goods takes place. In view of the discussion, it is pertinent to note that various case laws relied by the appellant does not come to his rescue as the facts are clearly distinguishable as discussed in above paras. It is evident that the appellant has facilitated the bogus sales without delivered any goods which is clearly mentioned in assessment order. The appellant has not provided any details to prove the genuinity of business transactions till date. Thus, it is very clearly evident that the appellant has facilitated bogus sales to the said vendors and was unable to provide any relevant documentary proof sought. Hence, the Ground is noted as disallowed. Ground 03: The ground being general in nature does not require separate adjudication. In the end result, the appeal is DISALLOWED.” ITA Nos.: 179 & 180/KOL/2025 AYs: 2011-12 & 2015-16 Nezone Tubes Limited.
Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal.
Rival contentions were heard and the submissions made have been examined. It was submitted by the Ld. AR that the original assessment in this case was made on 29.08.2014 u/s 143(3)/153A of the Act assessing the returned total income of ₹8,75,36,416/-. Subsequently, a notice u/s 148 of the Act was issued on 31.03.2018. The assessee is a manufacturer of M.S. Pipes and Galvanized Pipes. The sales of ₹42.61 Lakh were made to M/s. Ambika Ispat Udyog which have been treated as bogus transactions. The reasons for reopening are mentioned at page 57 of the paper book filed and the same are as under: “Assessee is a company. In the instant case, return of income for A.Y. 2011- 12 was filed on 23.09.2011, declaring total income of Rs.8,79,96,137/- The case was assessed u/s 143(3) on 29.08.2014, assessing total income of Rs.8,75,36,420/- Information has been received from ADIT (Inv.). Unit 5, Kolkata vide Letter No.ADIT (Inv.)/U-5/Kol/10011802/2017-18/7488 dated 05-09/03/2018 regarding fund remittances by various entities through a number of bank accounts. High RTGS credits were observed in the account bearing account no. 0459083000000005. The account number is in the name of Ambika Ispat Udyog. On enquiry/investigation, it was observed that the account under suspicion has mainly credited by way of transfers, RTGS, NEFT and clearings and the fund from the account has been further debited to many accounts. Notice u/s 131 of the Income Tax Act 1961 was issued to the assessee viz Ambika Ispat Udyog on 24.01.2018 but the same was returned back with the remarks as "Co. Abolished". The amounts were transferred after routing through different layers finally deposited an amount of Rs. 42,61,133/- in the A/c of the assessee company i.e. Nezone Tubes Ltd. In the F.Y. 2010-11 In view of this it can be inferred that the fund so transferred was unaccounted money of the assessee finally brought back to its regular books of accounts through accommodation entries ITA Nos.: 179 & 180/KOL/2025 AYs: 2011-12 & 2015-16 Nezone Tubes Limited. The assessee had never disclosed the above mentioned material fact fully and truly. A.O also had such information before receiving the said report from the Investigation wing. On perusing and analyzing the information so received from ADIT (Inv.), Unit-5, Kolkata vis-a vis return filed by the assessee and assessment record, I am fully satisfied and am of the firm belief that the amount of Rs.42,61,133/- is undisclosed income of the assessee and thus the income to that extent of Rs. 42,61,133/- has escaped assessment in terms of section 147 of the I.T Act, 1961. I, therefore, am fully satisfied that there is reason to believe that income to the tune of Rs.42,61,133/- has escaped assessment within the meaning of section 147 of the I.T. Act. This is for your information and necessary compliance. Please note that in case of any objection against above mentioned reason recorded, you are requested to submit your written objection within three (03) days from receipt of this letter.”
It was also submitted that summons u/s 131 of the Act were issued to Ambika Ispat Udyog but the same was returned back with the remark "Co. Abolished". The sale proceeds were treated as unaccounted money of the assessee routed through unexplained cash credit. It was stated that there was no direct link with M/s. Ambika Ispat Udyog and merely because the company was not in existence on the date of enquiry does not make the transactions bogus. The transactions are mentioned at page 69 of the paper book which is the party ledger and sale proceeds from 07.07.2010 to 10.09.2010 were made and the sale proceeds have been received on 07.07.2010 being the payment of opening balance of ₹11,75,082/- and subsequently by two cheques on 18.02.2011 and 24.02.2011 for ₹15 Lakh and ₹15,86,133/-, respectively. The sale took place during 26.07.2010 to 10.09.2010 through six bills and the opening balance of ₹11,75,082/- as on 01.04.2010 was received on 07.07.2010. Our attention was also drawn to page 70 of the paper book which contains a sample bill of the assessee issued to M/s. Ambika ITA Nos.: 179 & 180/KOL/2025 AYs: 2011-12 & 2015-16 Nezone Tubes Limited. Ispat Udyog, J.N. Mukherjee Road, Ghusuri, Howrah and pages 72 to 73 contain the invoice and the consignment note; however it is noted that the address of Delivery office is not mentioned on the consignment note no. 5280 dated 26.07.2010 and page 74 is the weighment certificate dated26.07.2010 and contain the details of 10.280 Kg. of the goods.
The Ld. AR has also placed reliance upon the decision of the Hon'ble Calcutta High Court in the case of M/s. Diagnostics Versus Commissioner of Income Tax, Kolkata-XX & Anr., ITA No. 153/2004 dated March 4, 2011. It was further stated that verification was done after seven years and if the party has stopped functioning, the transaction cannot be treated as non-genuine. The assessee had discharged the onus and after four years the requirement of the condition of failure on the part of the assessee to disclose fully and truly all material facts for the computation of income also are to be examined.
The Ld. DR argued that the assessment was reopened on the basis of receipt of information. There was no evidence for the movement of goods and none was filed during the assessment proceeding as per page 2 of the assessment order para 3. 2. Certain discrepancies were also noted as the assessee had not furnished the delivery challan, the road challan, details of movement of goods and purchase order received by the assessee regarding the alleged sale. The ledger of M/s. Ambika Ispat Udyog is on page 69 of the paper book which contains details, but nothing is mentioned about the details of sales made. Before the Ld. CIT(A)/Ld. AO, the details of transportation could not be furnished. Our attention was also drawn to the balance sheet and the audit report. ITA Nos.: 179 & 180/KOL/2025 AYs: 2011-12 & 2015-16 Nezone Tubes Limited.
We have considered the submissions made. The assessee contended that out of the sales of ₹340 Crore, only a sum of approximately ₹40 lakh has been treated as bogus sales only on the basis of the summons u/s 131 of the Act not being served on the party. Reliance was also placed upon the decision in the case of M/s. Diagnostics V Commissioner of Income Tax Kolkata-XX & Anr. [2011] 334 ITR 111 (Cal.), however the facts of the case of the assessee are different and the decision is distinguishable on facts. However, the fact remains that the assessee also could not furnish details of transportation expenses either before the Ld. CIT(A) or the Ld. AO. The Ld. AO has not excluded the sum of ₹4,26,133/- from the sales shown by the assessee, which he was required to do as the amount has been treated as bogus sales. Ideally, the books of account ought to have been rejected and the trading and profit and loss account should have been recast if part of the sales were to be treated as unexplained cash credits as the amount treated as unexplained cash credits cannot form part of the turnover on the basis of which the return was filed. Hence, in order to be fair to both the assessee as well as the Ld. Assessing Officer, the order of the Ld. CIT(A) is hereby set aside as apparently double addition has been made and the issue is remanded to the Ld. AO to allow an opportunity to the assessee to furnish the required details of transportation expenses supported by the transportation receipt as the only ground on which the addition was made was the absence of these documents coupled with the fact that the summons issued to the party to whom the sales were made was retuned unserved with the remark ‘Co. abolished’. The Ld. AO shall grant an opportunity of being heard to the assessee and after considering the details to be filed, including the amount paid and transportation expenses and after verifying the same, ITA Nos.: 179 & 180/KOL/2025 AYs: 2011-12 & 2015-16 Nezone Tubes Limited. if required, recompute the turnover and the total income of the assessee. Hence, for statistical purposes the grounds raised by the assessee are partly allowed.
In the result, the appeal filed by the assessee in ITA No. 179/KOL/2025 for AY 2011-12 is partly allowed for statistical purposes. B. Now, we shall take up ITA No. 180/KOL/2025 for AY 2015-16 for adjudication.
Brief facts of the case are that the assessee company is engaged in the business of manufacturing M S Pipes and Galvanized pipes and filed its original return of income on 26.09.2015. In response to the notice u/s 148 of Act dated 26.06.2021 the assessee filed the return of income on 21.07.2021, showing total income under normal provision at ₹11,95,32,380 and book profit u/s 115JB of the Act at ₹12,68,24,795/- . Subsequently, in view of the decision of the Honourable Supreme Court in the case of Union of India & Ors. Vs. Ashish Agarwal in Civil Appeal No. 3005/2022 and other Civil Appeals order dated 04.05.2022, an order u/s 148A(d) of the Act was passed after supplying to the assessee the information/material relied upon for reopening the assessment as the notice issued under the amended section 148 of the Act was deemed to have been issued under section 148A of the Act and construed or treated to be a show cause notice in terms of section 148A(b) of the Act. In response to the notice u/s 148 of Income-tax Act dated 30.07.2022, issued on the basis of the information received, the assessee submitted on 31.08.2022 that the return of income filed on 21.07.2021 may be treated as the return of income filed in response to the notice u/s 148 of the Act. In the instant case, the Ld. AO received ITA Nos.: 179 & 180/KOL/2025 AYs: 2011-12 & 2015-16 Nezone Tubes Limited. the information as the assessee had received accommodation entry totalling to ₹1,15,00,000/- from M/s Primary Investment Consultants Pvt. Ltd. (₹40,00,000/- + ₹25,00,000/- + ₹50,00,000/-), company controlled and managed by Shri Dilip Kumar Gupta for the said year. On the basis of information, the Ld. AO issued notice u/s 148 of the Act. In response to the same, the assessee had submitted partial details. On perusal of the documents furnished, the Ld. AO completed the assessment u/s 147 r.w.s 144B of the Act by assessing the total income at ₹13,85,32,380/- thereby raising tax demand of ₹1,55,15,526/-. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A) who restored the case of the assessee to the Ld. AO for deciding all the facts on merit in accordance with law by holding as under: “9.1 During the appeal proceedings, Assessment order, the grounds of appeal, submissions of the appellant and the relevant judicial pronouncements have been carefully considered and adjudicated as under:
2 The assessing officer passed the assessment order and brought out all the relevant facts. It is stated by the assessing officer that the assessee company is engaged in the business of manufacturing M S Pipes and Galvanized pipes and filed its return of income on 26.09.2015 declaring total income at Rs. 11,95,32,380/- and book profit u/s 115JB at Rs. 12,68,24,795/- for the A.Y. 2015-16. In the instant case, the Assessing officer received the information as the assessee had received accommodation entry totaling of Rs. 1,15,00,000/- from M/s Primary Investment Consultants Pvt Ltd (Rs. 40,00,000/- + 25,00,000/- + 50,00,000/-), and Rs. 75,00,000/- received from M/s Mangal Chand Property & Investment Pvt Ltd. It is also stated by the Assessing officer that the company controlled and managed by Shri Dilip Kumar Gupta for the said year. The assessee failed to discharge his onus of proofing the creditworthiness of the transaction and same was added by the assessing officer to the total income of the assessee for the said year.
3 During the course of appeal proceedings, the appellant has filed the submission and same has been carefully examined. It is stated by the appellant that the assessing officer has not provided the information and ITA Nos.: 179 & 180/KOL/2025 AYs: 2011-12 & 2015-16 Nezone Tubes Limited. statement on the basis of which the case of the appellant was reopened. During the course of assessment proceedings, the appellant requested being made to provide an opportunity to cross examine the witness of the department, same was provide through video conference but the witness of department did not appear and thus the statement of one Dilip Kumar Gupta on whose statement the case is based lost its significance/credibility. It is also submitted that non-appearance of witness Dilip Kumar Gupta cannot be reason for considering the transaction as accommodation and no adverse inference can be drawn.
4 It is also stated by the appellant that notice u/s 133(6) was issued by the Assessing officer to M/s Primary Investment Consultants Pvt Ltd to verify the said transaction. And as informed by M/s Primary Investment Consultants Pvt Ltd that they have made compliance to the said notice u/s 133(6) vide reply dated 09.05.2023 and have confirmed the loan transactions with the appellant company and that all the transaction have been made through banking channels. Further, M/s Primary Investment Consultants Pvt Ltd in its reply submitted before the AO all the details regarding loan transaction with the appellant company has also submitted source of loan received. And also provided the ledger, confirmation and bank statement reflecting transaction of the loan creditor.
5 During the course of appeal proceedings, the appellant stated that Assessing Officer had raised new issue by mentioning that the appellant company had received Rs.75,00,000/- from M/s Mangal Chand Property & Investment Private Limited (now SMRK Investment & Finance Pvt Ltd) which has been alleged as accommodation entry. Though, the appellant company was having one day time to explain and furnished the documents in respect of said transaction and though the same was not part of reason recorded for reopening the case. In this regard, the appellant stated that amount received from M/s Mangal Chand Property & Investment Private Limited is in the nature of loan which was taken for business on various dates and the same have been made through proper banking channels. Further, it is also stated by the appellant that the said loan was taken for very short duration and hence the same was also repaid in the next financial year i.e. 2015-16 and furnished various documents such as ledger of the said vendors, return of income, Balance sheet, source of fund investment, Bank statement, loan confirmation and MCA data. I have considered the rival submission of the appellant and have gone through the order passed by the Assessing Officer. I find that the Assessing Officer passed the assessment order by making addition in absence of proper reply on behalf of the appellant. ITA Nos.: 179 & 180/KOL/2025 AYs: 2011-12 & 2015-16 Nezone Tubes Limited.
6 With respect to the addition made by the AO on account of unexplained cash credit without examining the facts. As the Assessing officer failed to provide the information and statement on the basis of which the case of the appellant was reopened. And also failed to provide an opportunity to cross examination with Mr. Dilip Kumar Gupta and also not provided reasonable time of hearing to the appellant company. Therefore, in view of the power conferred as per clause (a) of sub-section (1) of section 251 of the act applicable with effect from 01.10.2024, I hereby set aside the impugned assessment order passed u/s. 147 r.w.s. 144B of the Income Tax Act to the file of the AO for fresh assessment. Therefore, the considering the facts and circumstances of the case, the assessment proceedings is restored back to the file of the Assessing Officer to decide all the facts on merit freshly in accordance with law. Needless to say that before passing the order, the Assessing Officer shall grant fair opportunity of being heard to the appellant. The Appellant is also directed to appear before the Assessing Officer as and when the date of hearing is given and to provide all necessary evidence and information without any further delay and not to seek the adjournment without any valid reason. According, the grounds of appeal by appellant are allowed for statistical purpose. In the end result, the appeal of the appellant is allowed for statistical purpose in above terms.”
Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal. Reliance was also placed by the Ld. AR upon the decision in the case of M/s. Diagnostics V Commissioner of Income Tax Kolkata-XX & Anr. [2011] 334 ITR 111 (Cal.), however the facts of the case of the assessee are different and the decision relied upon is distinguishable on facts.
Rival contentions were heard and the submissions made have been examined. During the course of the appeal, the Ld. AR contended that in view of the decision of the Hon'ble Supreme Court in the case of Union of India vs. Rajeev Bansal [2024] 167 taxmann.com 70 (SC), the assessment for A.Y. 2015-16 could not have been reopened under the new regime, and the notice issued under section 148 of the Act was ITA Nos.: 179 & 180/KOL/2025 AYs: 2011-12 & 2015-16 Nezone Tubes Limited. invalid on the date of issue of the notice. The Ld. DR relied upon the order of the Ld. CIT(A) and requested that the same may be upheld.
1 We have considered the submissions made, gone through the facts of the case and perused the record and the order of the Ld. CIT(A). Similar issue arose in the case of M/s. Kothari Metals Ltd. vs DCIT in ITA No. 2138/KOL/2024 for AY 2015-16 wherein the Coordinate Bench of the Hon'ble Tribunal has held as under:
“4. Rival contentions were heard and the submissions made have been examined. At the outset, the Ld. AR contended that the reopening of assessment for AY 2015-16 was barred on account of decision of the Hon'ble Supreme Court in the case of Union of India vs. Rajeev Bansal [2024] 167 taxmann.com 70 (SC)/[2024] 301 Taxman 238 (SC)/[2024] 469 ITR 46 (SC)[03-10-2024].
We have heard the rival contentions and also gone through the facts and circumstances of the case. Ground nos. 1, 4, 5 and 8 relate to the reopening being bad in law, specifically in ground no. 1 in which it is averred that the notice u/s 148 of the Act was barred by limitation since the notice u/s 148A(b) of the Act having been initiated after six years from the assessment year, the assessment year in question was not covered by TOLA as admitted by the Ld. ASG in the case of Rajeev Bansal (supra) and so held in the said judgement. The Ld. AR has filed a brief note on the arguments in which ground nos. 2, 6, 7, 8 and 9 are not pressed and ground nos. 11 to 15 are in relation to merits of the case. As regards ground nos. 1, 3, 4 and 5 the submissions are reproduced as under: “The appeal is filed against reassessment order framed by AO. The assessee is firstly agitating Ground No. 1 regarding the validity of the reassessment proceedings as the same is barred by limitation. Reference in this connection is invited to the judgement of Hon'ble Apex Court in the case of Rajeev Bansal pronounced on 03.10.2024. Attention is invited to page 52 para f where the revenue conceded before the Hon'ble Apex Court that for the Asst Year 2015-16 all notices issued on or after 01.04.2021 have to be dropped as they will not fall for completion during the period prescribed under TOLA. The judgement has now also been followed by Delhi High Court in the case of Ibibo Group Pvt. Ltd. vs. ACIT in WP(C) No.17639/2022 judgment and order dated 13/12/2024. It has been held that reopening for Asst Year 2015-16 is not permissible in the extended ITA Nos.: 179 & 180/KOL/2025 AYs: 2011-12 & 2015-16 Nezone Tubes Limited. period as per TOLA on and from 01.04.2021. Attention is also invited to the decision of Rajasthan High Court in Civil Writ Petition No. 3667/2023 pronounced on 27.01. 2025 which has also taken the same view. The aforesaid judgements are also being followed by Coordinate Bench of ITAT. Reference is invited to the decision of Coordinate Bench of Mumbai ITAT in the case of Manish Financial in ITA No. 1505/mum/2024 pronounced on 02.12.2024. Latest judgement in the case of Orbit Financial Capital pronounced on 31/12/2024 in ITA No. 5812/M/2024 is also being filed herewith. Now the Kolkata Bench of ITAT in the case of Coplama Products in ITA No. 1806/Kol/2024 pronounced on 31.01.2025 has also taken the same view. Hence the reassessment may please be quashed. It is also submitted that the aforesaid legal issue was not before CIT(A) since the order of the Apex Court was delivered after the decision by CIT(A). However it has been held by Hon'ble Bombay High Court in the case of Kansai Nerolac Paints reported in 364 ITR 632 that legal issue if raised before ITAT for the first time has to be decided by the ITAT and cannot be remanded to the lower authorities. Ground No. 2 is not pressed. In ground No. 3 & 5, it is submitted that the original assessment was completed u/s 143(3) wherein all facts were fully disclosed. There was nothing in the reasons recorded prior to issue of initial notice u/s 148 that there was failure on the part of the assessee to disclose truly and fully all material facts necessary for reassessment. Hence since the original notice itself was bad in law, it could not be treated as a valid notice as per Hon'ble Apex Court decision in the case of Ashish Agarwal. Hence the entire reassessment is liable to be quashed. In Ground No. 4, it is submitted that that Ld. CIT (A) erred in confirming the order of the AO when the notice u/s 148A(b) issued was barred by limitation since the materials were forwarded after the deadline fixed by the Hon'ble Apex Court and further complete materials were never sent along with the show cause notice. Hence the entire reassessment is liable to be quashed.”
We have gone through the submissions made. Hon'ble Supreme Court in the case of Rajeev Bansal (supra) have held as under:
“52. In Ashish Agarwal (supra), this Court held that the benefit of the new regime must be provided for the reassessment conducted for the past periods. The increase of the monetary threshold from Rupees one lakh to Rupees fifty lakh is beneficial for the assessees. Mr Venkataraman has also conceded on behalf of the Revenue that all ITA Nos.: 179 & 180/KOL/2025 AYs: 2011-12 & 2015-16 Nezone Tubes Limited. notices issued under the new regime by invoking the six year time limit prescribed under section 149(1)(b) of the old regime will have to be dropped if the income chargeable to tax which has escaped assessment is less than Rupees fifty lakhs. . .
When enacting a statute, the legislature often endeavours to ensure that the provisions of one legislation do not conflict with provisions of another legislation. Interplay (supra) [between Arbitration Agreements under the Arbitration and Conciliation Act 1996 and the Indian Stamp Act 1899, 2023 INSC 1066]. The purpose of the Income-tax Act is to levy tax on income and raise revenues for the functioning of the Government. On the other hand, the purpose of TOLA is to provide relaxation of the time for completion of any actions or proceedings falling for completion within a particular period. Thus, the two enactments operate in separate and distinct fields. This Court must ensure that the provisions of the two enactments are interpreted harmoniously unless there is an irreconcilable conflict between them. . . b. Reading TOLA into Section 149
After 1 April 2021, the Income-tax Act has to be read along with the substituted provisions. The substituted provisions apply retrospectively for past assessment years as well. On 1 April 2021, TOLA was still in existence, and the Revenue could not have ignored the application of TOLA and its notifications. Therefore, for issuing a reassessment notice under section 148 after 1 April 2021, the Revenue would still have to look at: (i) the time limit specified under section 149 of the new regime; and (ii) the time limit for issuance of notice as extended by TOLA and its notifications. The Revenue cannot extend the operation of the old law under TOLA, but it can certainly benefit from the extended time limit for completion of actions falling for completion between 20 March 2020 and 31 March 2021. 69. For instance, Section 149(1)(a) of the new regime specified the time limit of three years from the end of the relevant assessment year for reopening of the assessment. For assessment year 2017-2018, the three year period expired on 31 March 2021. The expiry of time fell within the time period contemplated by Section 3 of TOLA read with its notifications. Resultantly, the Revenue had time until 30 June ITA Nos.: 179 & 180/KOL/2025 AYs: 2011-12 & 2015-16 Nezone Tubes Limited. 2021 to issue a reassessment notice for assessment year 2017-2018 under section 149(1)(a). This harmonious reading gives effect to the legislative intention of both the Income-tax Act and TOLA. Moreover, Sections 147 to 151 are machinery provisions. Therefore, they must be given an interpretation that is consistent with the object and purpose of the Income-tax Act. . .
The above table indicates that the specified authority is directly co-related to the time when the notice is issued. This plays out as follows under the old regime: (i) If income escaping assessment was less than Rupees one lakh: (a) a reassessment notice could be issued under section 148 within four years after obtaining the approval of the Joint Commissioner; and (b) no notice could be issued after the expiry of four years; and (ii) If income escaping was more than Rupees one lakh: (a) a reassessment notice could be issued within four years after obtaining the approval of the Joint Commissioner; and (b) after four years but within six years after obtaining the approval of the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner.
After 1 April 2021, the new regime has specified different authorities for granting sanctions under section 151. The new regime is beneficial to the assessee because it specifies a higher level of authority for the grant of sanctions in comparison to the old regime. Therefore, in terms of Ashish Agarwal (supra), after 1 April 2021, the prior approval must be obtained from the appropriate authorities specified under section 151 of the new regime. The effect of Section 151 of the new regime is thus: (i) If income escaping assessment is less than Rupees fifty lakhs: (a) a reassessment notice could be issued within three years after obtaining the prior approval of the Principal Commissioner, or Principal Director or Commissioner or Director; and (b) no notice could be issued after the expiry of three years; and (ii) If income escaping assessment is more than Rupees fifty lakhs: (a) a reassessment notice could be issued within three years after obtaining the prior approval of the Principal Commissioner, or Principal Director or Commissioner or Director; and (b) after three years after obtaining the prior approval of the Principal Chief ITA Nos.: 179 & 180/KOL/2025 AYs: 2011-12 & 2015-16 Nezone Tubes Limited. Commissioner or Principal Director General or Chief Commissioner or Director General.
Grant of sanction by the appropriate authority is a precondition for the assessing officer to assume juri iction under section 148 to issue a reassessment notice. Section 151 of the new regime does not prescribe a time limit within which a specified authority has to grant sanction. Rather, it links up the time limits with the juri iction of the authority to grant sanction. Section 151(ii) of the new regime prescribes a higher level of authority if more than three years have elapsed from the end of the relevant assessment year. Thus, non- compliance by the assessing officer with the strict time limits prescribed under section 151 affects their juri iction to issue a notice under section 148. 77. Parliament enacted TOLA to ensure that the interests of the Revenue are not defeated because the assessing officer could not comply with the pre conditions due to the difficulties that arose during the COVID-19 pandemic. Section 3(1) of TOLA relaxes the time limit for compliance with actions that fall for completion from 20 March 2020 to 31 March 2021. TOLA will accordingly 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 an extended time till 30 June 2021 to grant approval. 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 time till 31 March 2021 to grant approval. The time limit for Section 151 of the old regime expires on 31 March 2021 because the new regime comes into effect on 1 April 2021. 78. For example, the three year time limit for assessment year 2017- 2018 falls for completion on 31 March 2021. It falls during the time period of 20 March 2020 and 31 March 2021, contemplated under section 3(1) of TOLA. Resultantly, the authority specified under section 151(i) of the new regime can grant sanction till 30 June 2021. 79. Under Finance Act 2021, the assessing officer was required to obtain prior approval or sanction of the specified authorities at four stages: ITA Nos.: 179 & 180/KOL/2025 AYs: 2011-12 & 2015-16 Nezone Tubes Limited. a. Section 148A(a) - to conduct any enquiry, if required, with respect to the information which suggests that the income chargeable to tax has escaped assessment; b. Section 148A(b) - to provide an opportunity of hearing to the assessee by serving upon them a show cause notice as to why a notice under section 148 should not be issued based on the information that suggests that income chargeable to tax has escaped assessment. It must be noted that this requirement has been deleted by the Finance Act 2022;33 c. Section 148A(d) - to pass an order deciding whether or not it is a fit case for issuing a notice under section 148; and d. Section 148 - to issue a reassessment notice.
In Ashish Agarwal (supra), this Court directed that Section 148 notices which were challenged before various High Courts "shall be deemed to have been issued under section 148-A of the Income-tax Act as substituted by the Finance Act, 2021 and construed or treated to be show-cause notices in terms of Section 148-A(b)." Further, this Court dispensed with the requirement of conducting any enquiry with the prior approval of the specified authority under section 148A(a). Under Section 148A(b), an assessing officer was required to obtain prior approval from the specified authority before issuing a show cause notice. When this Court deemed the Section 148 notices under the old regime as Section 148A(b) notices under the new regime, it impliedly waived the requirement of obtaining prior approval from the specified authorities under section 151 for Section 148A(b). It is well established that this Court while exercising its juri iction under Article 142, is not bound by the procedural requirements of law High Court Bar Association v. State of U P [2024] 160 taxmann.com 32/299 Taxman 21 (SC)/[2024] 6 SCC 267. 81. This Court in Ashish Agarwal (supra) directed the assessing officers to "pass orders in terms of Section 148-A(d) in respect of each of the assesses concerned." Further, it directed the assessing officers to issue a notice under Section 148 of the new regime "after following the procedure as required under section 148-A." Although this Court waived off the requirement of obtaining prior approval under section 148A(a) and Section 148A(b), it did not waive the requirement for Section 148A(d) and Section 148. Therefore, the assessing officer was required to obtain prior approval of the specified authority according to Section 151 of the new regime before passing an order under section 148A(d) or issuing a notice under section 148. These ITA Nos.: 179 & 180/KOL/2025 AYs: 2011-12 & 2015-16 Nezone Tubes Limited. notices ought to have been issued following the time limits specified under section 151 of the new regime read with TOLA, where applicable. F. Section 148 notices issued in June-September 2022 i. Scope of Article 142
In Ashish Agarwal (supra), this Court allowed the assesses to avail all the defences, including the defence of expiry of the time limit specified under section 149(1). In the instant appeals, the reassessment notices pertain to the assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017, and 2017-2018. To assume juri iction to issue notices under section 148 with respect to the relevant assessment years, an assessing officer has to: (i) issue the notices within the period prescribed under section 149(1) of the new regime read with TOLA; and (ii) obtain the previous approval of the authority specified under section 151. A notice issued without complying with the preconditions is invalid as it affects the juri iction of the assessing officer. Therefore, the reassessment notices issued under section 148 of the new regime, which are in pursuance of the deemed notices, ought to be issued within the time limit surviving under the Income-tax Act read with TOLA. A reassessment notice issued beyond the surviving time limit will be time-barred. G. Conclusions
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 ITA Nos.: 179 & 180/KOL/2025 AYs: 2011-12 & 2015-16 Nezone Tubes Limited. 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;”
Admittedly the notice u/s 148 of the Act was issued on 30.06.2022 i.e. beyond the TOLA period and as per the decision of the Hon'ble Supreme Court such a notice under the old regime could have been issued only up to 31.03.2022 and the benefit of extension of due date as per TOLA would be applicable only to the notices issued between 01.04.2021 to 30.06.2021 if the limitation for issuing such notices was expiring between 20 March 2020 and 31 March 2021 The limitation for A.Y. 2015-16 was expiring on 31.03.2022, i.e. beyond the period of 20.03.2020 to 31.03.2022, therefore, the benefit of TOLA would not be applicable. Further, in view of the first proviso to section 149(1) of the Act. The time limit for reopening assessments has been reduced from four years to three years. However, in cases where income that escaped assessment amounts to ₹50 lakhs or more, assessments can be reopened within ten years. The new regime prohibits reopening of assessments that were time-barred under the old regime. The provisions of section 149 of the new regime are as under:
(1) No notice under section 148 shall be issued for the relevant assessment year,— ITA Nos.: 179 & 180/KOL/2025 AYs: 2011-12 & 2015-16 Nezone Tubes Limited. (a) if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b); b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax, represented in the form of— (i) an asset; (ii) expenditure in respect of a transaction or in relation to an event or occasion; or (iii) an entry or entries in the books of account, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more:] Provided that no notice under section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 1st day of April, 2021, if a notice under section 148 or section 153A or section 153C could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of sub-section (1) of this section or section 153A or section 153C, as the case may be, as they stood immediately before the commencement of the Finance Act, 2021: {emphasis supplied}
In this case the notice u/s 148 of the Act was earlier issued on 09.04.2021 which was treated as show cause notice u/s 148A(b) of the Act but the order u/s 148A(d) of the Act has been passed on 30.06.2022 and as per the old provisions of reassessment, the notice u/s 148 of the Act after complying with the procedural requirement as per the amended provisions ought to have been issued by 31.03.2022 after excluding the period granted to file the reply in response to the notice u/s 148A(b) of the Act. Since the limitation for issue of notice u/s 148 of the Act expired on 31.03.2022 under the old regime and for AY 2015-16 as per page 2 of the assessment order the notice u/s 148 has been issued on 30.06.2022, the benefit of TOLA for extending the limitation for issue of notice u/s 148 of the Act will not be available to the Revenue. Hence, in view of the decisions relied upon by the Ld. AR (supra), the notice issued u/s 148 of the Act on 30.06.2022 is barred by limitation and the assessment order is hereby quashed and appeal of the assessee is allowed. Other issues are not adjudicated as the assessment order has been quashed. ITA Nos.: 179 & 180/KOL/2025 AYs: 2011-12 & 2015-16 Nezone Tubes Limited.
In the result, the appeal filed by the assessee is allowed.”
Thus, respectfully following the decision of the Hon'ble Tribunal in the case of M/s. Kothari Metals Ltd. (supra), which has relied upon the decision of the Honourable Supreme Court in the case of Rajeev Bansal (supra), we hold that the notice issued u/s 148 of the Act on 30.07.2022 was barred by limitation on the date of issue and could not have been issued validly and the consequential reassessment order is hereby quashed as the time-limit for issuing the notice section 148 of the Act under the unamended provision had expired on 31/03/2022, which limitation was not extended by TOLA and the appeal of the assessee is allowed.
In the result, the appeal filed by the assessee in ITA No. 180/KOL/2025 for A.Y. 2015-16 is allowed while that in ITA No. 179/KOL/2025 for AY 2011-12 is partly allowed for statistical purposes. Order pronounced in the open Court on 13th January, 2026. [George Mathan] [Rakesh Mishra] Judicial Member Accountant Member Dated: 13.01.2026 Bidhan (Sr. P.S.) ITA Nos.: 179 & 180/KOL/2025 AYs: 2011-12 & 2015-16 Nezone Tubes Limited. Copy of the order forwarded to:
Nezone Tubes Limited, Nezone House, 19, Jatin Das Road, Kolkata, West Bengal, 700029. 2. DCIT, Circle-1(1), Kolkata.
CIT(A)-NFAC, Delhi.
CIT-
CIT(DR), Kolkata Benches, Kolkata.
Guard File. //// By order