INCOME TAX OFFICER-3(1), RAIPUR, RAIPUR vs. VIGHNESHWAR ISPAT PVT LTD, RAIPUR
Facts
The assessee, Vighneshwar Ispat Pvt. Ltd., filed a nil return for AY 2014-15. The assessment was reopened under Section 147 of the Income Tax Act, 1961, and the AO made additions totaling Rs.2,19,11,723/- under Section 68, citing unexplained credits, suspicious transactions, and non-genuine profits. The assessee challenged the reassessment order before the CIT(A)/NFAC, arguing that the notice for reassessment was time-barred.
Held
The CIT(A)/NFAC set aside the reassessment order, holding that the notice issued under Section 148 on 26.07.2022 was beyond the permissible limitation period. The tribunal upheld the CIT(A)'s decision, confirming that the notice was time-barred as per the provisions of the Income Tax Act, as amended by the Finance Act, 2021, and the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA), read with Supreme Court judgments in Union of India vs. Ashish Agrawal and Rajeev Bansal. Consequently, the entire reassessment proceedings were deemed void ab initio.
Key Issues
Whether the reassessment notice issued under Section 148 of the Income Tax Act, 1961, on 26.07.2022, was time-barred, and if the CIT(A) was justified in setting aside the reassessment order based on the invalidity of these proceedings.
Sections Cited
Section 147, Section 148, Section 148A(b), Section 148A(d), Section 149(1)(b), Section 144, Section 144B, Section 68, Section 115BBE, Section 271(1)(c), Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, Finance Act, 2021
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR
Before: SHRI PARTHA SARATHI CHAUDHURY & SHRI ARUN KHODPIA
आदेश / ORDER PER PARTHA SARATHI CHAUDHURY, JM:
The captioned appeal preferred by the revenue emanates from the order of the Ld.CIT(Appeals)/NFAC, Delhi dated 12.03.2025 for the assessment year 2014-15 as per the following grounds of appeal: “1. "Whether on the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in setting aside the re-assessment order dated 24.05.2023 passed u/s.147 r.w.s. 144 r.w.s. 144B of the Income Tax Act, 1961 by holding that the notice u/s.148 issued on 26.07.2022 was beyond permissible limitation period, despite the applicability of the extended time limit u/s.149(1)(b)?" 2. "Whether on the facts and in the circumstances of the case and in law, he Id. CIT(A) failed to appreciate that the notice dated 30.06.2021 was deemed to be a show-cause notice u/s. 148A(b) in light of the judgment of the Hon'ble Supreme Court in the case of Union of India Vs. Ashish Agrawal and that the subsequent notice u/s 148 dated 26.07.2022 was issued in due compliance with Section 148A(d) of the Act and in compliance to CBDT's instruction no. 01/2022 dated 11.05.2022 and within the permissible time frame u/s 149(1)(b)?" 3. "Whether on the facts and in the circumstances of the case and in law, the Id. CIT(A) has erred in relying on the decision in the case of Rajeev Bansal & Ors. Vs. Union of India without appreciating that in the present case, the income alleged to have escaped assessment exceeded Rs. 50 lakh and was represented in the form of asset thereby falling squarely within the scope of Section 149(1)(b)?" 4. "Whether on the facts and in the circumstances of the case, the Id. CIT(A) was justified in deleting the addition of Rs.2,19,11,713 u/s 68 of the Act which was added by the AO?"
3 ITO-3(1), Raipur Vs. Vighneshwar Ispat Pvt. Ltd. ITA No. 343/RPR/2025
"Whether on the facts and in the circumstances of the case, the Id. CIT(A) was justified in deleting the addition of Rs.2,19,11,713 u/s 68 of the Act by ignoring the findings of the AO?" 6. The order of the CIT(A) is erroneous both in law and on facts. 7. Any other ground which may be adduced at the time of hearing.”
In this case, the Ld. CIT(Appeals)/NFAC had provided relief to the assessee setting aside the reassessment order dated 24.05.2023 passed u/s. 147 r.w.s. 144 r.w.s. 144B of the Income Tax Act, 1961 (for short ‘the Act’) by holding that the notice u/s. 148 of the Act issued on 26.07.2022 was beyond the permissible limitation period placing reliance on the decisions of the Hon’ble Apex Court in the cases of Union of India Vs. Ashish Agrawal (2022) 138 taxmann.com 64 (SC) and in the case of Rajeev Bansal (2024) 167 taxmann.com 70 (SC). The Ld. CIT(Appeals)/NFAC had adjudicated on this issue by observing as follows:
“Decision: I have gone through the above submissions of the appellant and have considered the facts and evidence on record. The appellant, Vigneshwar Ispat Pvt. Ltd. had e-filed original return of income on 23/09/2014 disclosing total income at Nil and taxes were paid under MAT. Subsequently, assessment proceedings for the A/Y 2014-15 was re-opened u/s 147 of the Income Tax Act, 1961. Later, the AO completed the assessment u/s 147 r.w.s 144 r.w.s. 144B of the Income Tax Act, 1961 by assessing total income of the appellant at Rs.2,19,11,723/-. Being aggrieved by the above mentioned order passed by the AO, the appellant filed the instant appeal.
4 ITO-3(1), Raipur Vs. Vighneshwar Ispat Pvt. Ltd. ITA No. 343/RPR/2025
The present appeal arises from the. reopening of the assessment for the Assessment Year 2014-15 under Section 148 of the Income Tax Act, 1961 (IT Act), wherein the appellant challenges the legality and validity of the reopening proceedings initiated through the notices issued under Section 148 on 30.06.2021 based on the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) and the judgment of the Hon'ble Supreme Court in the case of Union of India vs. Ashish Agarwal (2022) 444 ITR 1 (SC).re-issued on 26.07.2022 , which the appellant contends are time-barred under the provisions of the Income Tax Act as amended by the Finance Act, 2021, and the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA). The appellant, Vighneshwar Ispat Pvt. Ltd., is a private limited company engaged in the business of manufacturing iron and steel products. The appellant filed its return of income for the Assessment Year (AY) 2014-15 on 23.09.2014, declaring a total income of Rs.NIL and taxes paid under Minimum Alternate Tax (MAT). Subsequently, the assessment for AY 2014-15 was reopened under Section 147 of the Income Tax Act, 1961, by issuing a notice under Section 148 on 30.06.2021 based on the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) on extended time and further regularized w.r.t. the judgment of the Hon'ble Supreme Court in the case of Union of India vs. Ashish Agarwal (2022) 444 ITR 1 (SC) and accordingly order passed to reopen the case u/s 148A(d) of the Act dt. 26.07.2022 'that the assessee has failed to explain the suspicious transaction of Rs.20,00,000/- made with M/s. Bluemoon Enterprises and non-genuine profit of Rs. 58,33,044/- earned from USE Equity Derivative through during the F.Y. 2013-14 relevant to A.Y. 2014-15'. On the conclusion of reassessment proceedings, the Assessing Officer (AO) made additions totaling Rs.2,19,11.713/- under Section 68 of the Income Tax Act, 1961, on various grounds, including unexplained credits, refunds of advances, and realization of income. The appellant has filed the present appeal against the assessment order dated 24.05.2023, challenging the additions made by the A.O on various ground. As per the assessment order against which present appeal is under adjudication the contents are mainly as under:
5 ITO-3(1), Raipur Vs. Vighneshwar Ispat Pvt. Ltd. ITA No. 343/RPR/2025
6 ITO-3(1), Raipur Vs. Vighneshwar Ispat Pvt. Ltd. ITA No. 343/RPR/2025
7 ITO-3(1), Raipur Vs. Vighneshwar Ispat Pvt. Ltd. ITA No. 343/RPR/2025
8 ITO-3(1), Raipur Vs. Vighneshwar Ispat Pvt. Ltd. ITA No. 343/RPR/2025
5.1.1 Ground No. 1: The appellant contended that the notice issued under Section 148 of the Income Tax Act, 1961, on 30/06/2021, and the reissued notice on 26/07/2022, were time-barred under Section 149 of the Income tax Act, 1961 despite the applicability of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA). The appellant argued that the jurisdictional Assessing Officer (AO) ignored objections and proceeded with unlawful, unjustified, and arbitrary proceedings, requesting the assessment order to be set aside. 5.1.2 The appellant relied on TOLA, which extended the time limit for issuing reassessment notices under Section 148 of the Income tax Act, 1961 from 20/ 03/2020 to 31/03/2021, until 30/06/2021. The Hon'ble Supreme Court. in Union of India v. Ashish Agarwal, deemed the reassessment notices issued under the old regime as show-cause notices under the new regime, creating a legal fiction that preserved the time limit for further proceedings. 5.1.3 The legal fiction created by Ashish Agarwal judgement stopped the clock of limitation from the date of issuance of the deemed notices (30/06/2021) until the Hon'ble Supreme Court's decision on 04/05/2022. The period from 04/05/ 2022 to 26/05/2022 (when the AO issued the notice under Section 148A(b)) of the Income tax Act, 1961 was also excluded from the limitation period. Additionally, the two- week period granted to the appellant to respond to the notice was excluded. 5.1.4 By the time the AO issued the notice on 26/07/2022, the limitation period had already expired. The AO had no remaining time to issue the notice under Section 148 of the Income tax Act, 1961 or pass an order under Section 148A(d) of the Income tax Act, 1961 5.1.5 The notice dated 26/07/2022 was issued beyond the permissible limitation period. Consequently, the assessment order dated 24/05/2023, framed under Section 147 of the Income tax Act, 1961 , was set aside. 5.1.6 In result the appeal is allowed, and the impugned notice dated 26/07/ 2022, the order under Section 148A(d) of the Income tax Act, 1961 and the assessment order dated 24.03.2023 is hereby set aside.”
9 ITO-3(1), Raipur Vs. Vighneshwar Ispat Pvt. Ltd. ITA No. 343/RPR/2025
The Ld. Sr. DR on principle admitted the applicability of the said decision of the Hon’ble Supreme Court (supra) by the Ld. CIT(Appeals)/NFAC but supported the contention of the A.O in the reassessment order passed u/s. 147 r.w.s. 144 r.w.s. 144B of the Act dated 24.05.2023.
In this regard, the Ld. Counsel for the assesse has filed following written submissions:
10 ITO-3(1), Raipur Vs. Vighneshwar Ispat Pvt. Ltd. ITA No. 343/RPR/2025
11 ITO-3(1), Raipur Vs. Vighneshwar Ispat Pvt. Ltd. ITA No. 343/RPR/2025
12 ITO-3(1), Raipur Vs. Vighneshwar Ispat Pvt. Ltd. ITA No. 343/RPR/2025
The reopening of the assessment for A.Y.2014-15 u/s. 148 of the Act was challenged by the assessee regarding applicability and validity of such reopening initiated through notice issued u/s. 148 of the Act, dated 30.06.2021 based on the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) and the judgments of the Hon’ble Supreme Court in the case of Union of India Vs. Ashish Agrawal (supra) reissued on 26.07.2022. It was the contention of the assessee that such issuance of notice u/s. 148 of the Act was time barred as per provisions of the Act as amended by the Finance Act, 2021 and the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA).
The relevant facts considered by the Ld. CIT(Appeals)/NFAC are that the assessee is a private limited company engaged in the business of
13 ITO-3(1), Raipur Vs. Vighneshwar Ispat Pvt. Ltd. ITA No. 343/RPR/2025
manufacturing iron and steel products. The appellant filed its return of income for the Assessment Year (AY) 2014-15 on 23.09.2014, declaring a total income of Rs. NIL and taxes paid under Minimum Alternate Tax (MAT). Subsequently, the assessment for AY 2014-15 was reopened u/s. 147 of the Act, by issuing a notice u/s. 148 on 30.06.2021 based on the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) on extended time and further regularized with respect to the judgment of the Hon'ble Supreme Court in the case of Union of India vs. Ashish Agarwal (2022) 444 ITR 1 (SC) and accordingly, order passed to reopen the case u/s.148A(d) of the Act dt.26.07.2022 'that the assessee has failed to explain the suspicious transaction of Rs.20,00,000/- made with M/s. Bluemoon Enterprises and non-genuine profit of Rs. 58,33,044/- earned from USE Equity Derivative through during the F.Y. 2013-14 relevant to A.Y. 2014-15. The A.O had made addition totaling to Rs.2,19,11,173/- u/s. 68 of the Act on various grounds. The assessee had filed both grounds on merits as well as legal grounds before the first appellate authority and the Ld. CIT(Appeals)/NFAC as per decisions analyzing aforesaid provided relief to the assessee setting aside the assessment on the legal ground itself. It has been correctly held by the Ld. CIT(Appeals)/NFAC that by the time the A.O had issued notice on 26.07.2022, the limitation period has already expired. The A.O had no remaining time to issue the notice u/s. 148 of the Act or pass an order
14 ITO-3(1), Raipur Vs. Vighneshwar Ispat Pvt. Ltd. ITA No. 343/RPR/2025
u/s. 148A(d) of the Act. The said notice dated 26.07.2022 was therefore issued beyond the permissible limitation period. Subsequently, the assessment order dated 24.05.2023 framed u/s.147 r.w.s. 144 r.w.s. 144B of the Act was set aside, appeal of the assessee was allowed and the impugned notice dated 26.07.2022, the order u/s.148A(d) of the Act and the assessment order dated 24.05.2023 was set aside.
We are of the considered view that the Ld. CIT(Appeals)/NFAC has deliberated upon the facts of the assessee’s case and adjudicated it with the provisions of TOLA as interpreted through the judgments of the Hon’ble Supreme Court in the cases of Union of India Vs. Ashish Agrawal (2022) 138 taxmann.com 64 (SC) and in the case of Rajeev Bansal (2024) 167 taxmann.com 70 (SC), therefore, we do not find any infirmity in the order of the Ld. CIT(Appeals)/NFAC which is upheld.
As per the above terms grounds of appeal raised by the revenue are dismissed.
In the result, appeal of the revenue is dismissed.
Order pronounced in the open court on 30th day of July, 2025.
Sd/- Sd/- ARUN KHODPIA PARTHA SARATHI CHAUDHURY (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) रायपुर/ RAIPUR ; �दनांक / Dated : 30th July, 2025.
15 ITO-3(1), Raipur Vs. Vighneshwar Ispat Pvt. Ltd. ITA No. 343/RPR/2025
SB, Sr. PS आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to : 1. अपीलाथ� /The Appellant. 2. ��यथ� /The Respondent. 3. The Pr. CIT-1, Raipur (C.G.) 4. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, रायपुर ब�च, रायपुर / DR, ITAT, Raipur Bench, Raipur. 5. गाड� फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपील�य अ�धकरण, रायपुर / ITAT, Raipur.
