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Income Tax Appellate Tribunal, DELHI BENCH, ‘G’: NEW DELHI
Before: SHRI C.N. PRASAD & SHRI M. BALAGANESH
ORDER PER C.N. PRASAD, JM, These two appeals are filed by the assessee and revenue against the orders of the Ld.Commissioner of Income Tax (Appeals)/NFAC, Delhi [herein after referred as “CIT(A)”] for the dated 23.08.2024 for the A.Y. 2017-18. 2. The assessee in its appeal challenged reopening of assessment and the validity of notice issued u/s.148A of the Act and the revenue challenge the order of the CIT(A) in deleting the addition made in respect of the addition made u/s.69C of the Act. Since the assessee has challenged from validity of notice issued u/s.148 of the Act and the jurisdiction of AO in framing the assessment, first we take the appeal of the assessee for adjudication.
3. The assessee in its appeal raised following grounds :-
1. 1. 1. 1. 1 That under the facts and circumstances of the case both lower authorities erred in law in making and sustaining addition of Rs.11,75,128/-.
That the proceedings U/s.147 /148 are without jurisdiction and bad in law.
That under the facts and circumstances of the case, reasons to believe had not been recorded prior to issuance of notice U/s.148.
4. That under the facts and circumstances of the case, the proceedings are without jurisdiction as no notice us/. 148A has been issued in terms of Hon’ble Supreme Court case in case of Ashish Agarwal.
5. That the impugned order is without jurisdiction and bad in law as not issued interms of Section 151A.
Ld. Counsel for the assessee at the outset submits that in the case of the assessee notice dated 31.03.2021 u/s.148 of the Act was dispatched by speed post on 06.04.2021 as per the RTI reply dated 20.12.2024 which is placed at page-139 of the paper book. Referring to page-140 of the paper book which is the copy of notice dated 31.03.2021 with speed post acknowledgment which was provided by the Department in reply to application under RTI by the assessee, the Ld. Counsel submitted that the counterfoil of the speed post clearly suggest that the notice u/s. 148 dated 31.03.2021 was dispatched on 06.04.2021 to the assessee.
The Ld. Counsel for the assessee further submitted notice u/s.148 of the Act dated 31.03.2021 was sent through e-mail on 02.04.2021 and this fact was also confirmed by the AO vide RTI reply dated 22.09.2025 which is placed at pages 404 and 405 of paper book at para 2 and 3 of RTI reply. The Ld. Counsel for the assessee further submitted that the AO had confirmed that no notice u/s.148A(b), 148A(d) has been issued and this fact can be seen from the reply dated 20.12.2024 given by the AO on the RTI application made by the assessee which is placed at pages -139 of the paper book. It is the submission of the Ld. Counsel for the assessee that as per the AO’s own admission and as per the assessment order notice u/s.148 had been regularized interms of the decision of the Hon’ble Supreme Court in the case of Ashish Agarwal and therefore, procedure therein needs to be followed. Ld. Counsel stated that in the case of the assessee since the notice issued u/s.148 dated 31.03.2021 under old regime has not been validated by virtue of the decision of the Hon’ble Supreme Court in the case of Ashish Agarwa and no notice u/s.148A(b)/(d) has been issued the assessment framed pursuant to Section 148 notice is null and void. Ld. Counsel for the assessee also made brief submissions as under :- “Notice u/s. 148 dtd. 31.03.2021 (140). As per the RTI reply dtd 20.12.2024 (139) the notice u/s. 148 dtd. 31.03.2021 (14)) has been dispatched by speed post on 06.04.2021. Notice u/s. 148 dtd. 13.03.2021 has been sent through email on 02.04.2021. This fact had been confirmed by AO vide RTI reply dtd. 22.09.2025 (404-405) in Para 2 & 3 of the RTI reply.
AO had confirmed that no notice U/s.148 A(b)/148A(d) has been issued. This fact has been confirmed by AO in RTI reply dtd. 2012.2024 (139) in Para- (e). Thus, as per AO own admission and as per asstt. order notice U/s.148 had not been regularized in terms of Hon’ble Supreme Court decision in case of Ashish Agarwal. Notice U/s. 148 dtd. 31.03.2021 has been digitally signed on 31.03.2021, however dispatched on or after 01.04.2021 by speed post/ email and needs to be construed as being issued after 01.04.2021 as held by Hon’ble Delhi High Court in the case of Suman Jeet Agarwal Vs. ITO (2022) 449 ITR 517 (DEL). And procedure as per Ashish Agarwal needs to be followed, the Hon’ble Delhi High Court has held as under :- “31.3 Category C : The petitions challenging notices falling under Category “C” which were digitally signed on 31st of March 2021, are disposed of with the direction to the JAO’s to verify and determine the date and time of dispatch as recorded in the ITBA portal in accordance with the law laid down in this Judgment as the date of issuance. If the date and time of dispatch recorded is on or after 1 of April, 2021, the notices are to be considered as show-cause notices under Sec 1484(b) as per the directions of the Apex Court in the Ashish Agarwal (supra) Judgement." In the present case as date of dispatch is on or after 01.04.2021, thus, the notice U/s. 148 dtd. 31.03.2021 is to be treated as notice U/s. 148A(b) of the Act and thereafter the procedure of the new regime under Section 148A needs to be followed and order U/s. 148A(d) and notice U/s. 148 needs to be issued afresh, this had not been done in the present case by the AO. DCIT VS. SBC MINERALS (P) LTD. IN DTD. 21.02.2025 OF DELHI ITAT (406-410) has held as under:- Reassessment Limitation Notice issued under unamended s. 148-As per Supreme Court said notice shall be deemed to have been issued under s. 1481 as substituted by the Finance Act, 2021 and be construed or treated as showcause notice under s. 148-A(b) In the case the notice under s. 148 bears the date as 31st March, 2021 whereas, the notice is digitally signed by the AO on 1st April, 2021-Fact that whole scheme of reassessment has been changed w.e.f. 1st April, 2021 by The Finance Act 2021. NFAC examined the issue if the reopening notice in this case will be treated as having been issued on 31st March, 2021 or on 1st April, 2021. and observed that in case, the reopening notice is Page | 4 found to have been issued on 31st March, 2021, the old provisions of ss. 147, 148, 149 and 151 shall apply otherwise the new reassessment laws will apply-It was conclude that in this case, the AO has issued notice under s. 148 which is dt. 31st March, 2021 and the AO has not followed the procedure prescribed under new scheme of reassessment and thus the AO has issued the notice under s. 148 under the provisions of ss. 147, 148, 149 and 151 as they stood before their substitution by Finance Act, 2021 w.e.f. 1st April, 2021- AO has issued the re-opening notice under s. 151(2) as it stood prior to Ist April, 2021 as is evident from the fact that no prior approval/satisfaction of Principal Chief CIT or Principal CIT has been obtained by the AO- Instead, necessary satisfaction of the Jt. CIT has been obtained-AO has not passed any order under s. 148A(d) with approval of specified authority Thus, it is clear that the AO has completed the reassessment proceedings under old provisions of the Act-Impugned notice under x. 148 of the Act shall be treated to have been issued on 1st April, 2021 as the same has been digitally signed by the AO on 1st April, 2021 and in no case, issue of notice can take place before signing of the same either electronically or otherwise Thus, in this case, the reassessment notice was held to be issued on 1st April, 2021 and accordingly, new provisions of making reassessment, Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (hereinafter referred to as "TOLA"), ratio of Supreme Court Judgement and consequent CBDT Instruction No. 1 of 2022, dt. 11th May, 2022 are made applicable by the NFAC-Hence NFAC has rightly decided against the 40-Union of India & Ors. vs. Rajeev Bansal & Ors. (2024) 340 CTR (SC) 865: (2024)2/5 242 DTR (SC) 292 and Union of India & Ors. vs. Ashish Aggarwal (2022) 326 CTR (SC) 473: (2022) 123 DTR (SC) 217 followed. Similarly in case of SVR CREATIONS PVT. LTD. VS. PCIT IN DTD. 05.03.2025 OF DELHI ITAT (411423) it has been held as under:- "8. In the instant case, from the perusal of the notice issued u/s. 148, we find the said though was digitally signed on 31 March, 2021 however, the same is sent to the assesse only on 01/04/2021 which is evident from the email to the assesse, as available at paper book page 2 filed by the assesse. The Hon'ble Jurisdictional High Court in the case of Suman Jeet Agarwal vs. ITO in WP(C) No. 10/2022, CM appeal No. 16/2022 vide order dated 27/09/2022 has catergorized those cases Page | 5 under category-C, where the notices w/s. 148 of the Act were issued u/s. 148 of the ct are served upon the assesse on or after 01/04/2021. As per Hon'ble High Court in such cases, following directions are given: "31.3 Category C: The petitions challenging notices falling under Category "C" which were digitally signed on 31 of March 2021, are disposed of with the direction to the JAO's to verify and determine the date and time of dispatch as recorded in the ITBA portal in accordance with the law laid down in this judgement as the date of issuance. If the date and time of dispatch recorded is on or after 1" of April, 2021, the notices are to be considered as show-cause notices under Sec. 1484(b) as per the directions of the Apex Court in the Ashish Agarwal (supra) judgement." As observed above, the notice in the present case was dispatched /served upon the assesse on 01/04/2021, thus the same should be treated as notice Uls. 1484(h) and AO should complete the consequent proceedings as provided U/s. 1484 of the Act However, the AO has proceeded to pass order u/s. 148 r.w.s. 1448 of the Act on the notice so issued u/s 148 on 31.03.2021 served upon the assessee on 01/04/2021.ths, in view of the order of Hon'ble Jurisdictional High Court in the case of Suman Jeet Agarwal (supra), we hold the order so passed without following the procedure prescribed u/s. 148 of the Act is bad in law and is invalid." Similarly in case of MUKESH KHURANA VS. DCIT IN DTD. 21.03.2025 OF DELHI ITAT (424-445) in Para-13 to 15 the order passed under old regime was held to be bad in law. Similarly in case of ABDULWAHID ABDULKARIM QURESHI VS. ITO IN & 894/PUN/2024 DTD. 06.08.2025 OF PUNE ITAT (446455) it has been held as under:- Reassessment Notice under s 148-Procedure mandated under the new provisions of s. 148 r/w s. 148A-Notice under s. 148 has not been issued on the e-mail and the mode of dispatch is through DAK post-Learned AO has himself admitted that notice under s. 148 dt. 31st March, 2021 has been issued on 3rd April, 2021-Under these facts and circumstances the notice under s. 148 has been digitally signed by the learned AO on 31st March, 2021 but issued to the assessee on 3rd April, 2021 and the re-assessment proceedings should have been carried out by issuing notice under s. 148 as per the old provisions applicable upto 31st March, 2021-For asst. yr. 2016-17 have been triggered by the notice under s. 148 dt. 31st March, 2021-But issued to the Page | 6 assessee on 3rd April, 2021, therefore AO should have followed the new provisions of s. 148 r/w s. 148A applicable from 1st April, 2021 for carrying out the re- assessment proceedings-Since notice under s. 148 has been issued on 3rd April, 2021 under the erstwhile old provisions applicable prior to 31st March, 2021, the said notice under s. 148 is invalid and bad in law and therefore the consequential re-assessment proceedings for asst. yr. 2016-17 in the case of the assessee are held to be invalid and bad in law and are quashed. Thus, following the ration of above decided case the order passed U/s. 147 dtd. 11.11.2022 needs to be held as bad in law as same had been passed without following the procedure under new regime U/s. 148A.
On the other hand the Ld. DR supported the orders of the authorities below.
Heard rival contentions, perused the orders of the authorities below and the materials placed before us. The evidences produced before us in the form of reply to RTI application clearly establishes the fact that notice u/s.148 dated 31.03.2021 was issued to the assessee through post on 06.04.2021 and through e-mail on 02.04.2021 which are all after 31.03.2021. Any notice issued after 31.03.2021 to the assessee u/s.148 shall have to be validated by virtue of the decision of the Hon’ble Supreme Court in the case of Ashish Agarwal. Admittedly in this case no notice u/s.148A(b), 148A(d) was issued by the AO validating the notice earlier issued on 31.03.2021 u/s.148 of the Act. This is evident from the reply dated 20.12.2024 given by the AO in response to application made by the assessee.
Identical issue came up for adjudication before the coordinate Bench of this Tribunal in the case of Santosh Hospitals dated 17.09.2025 and the coordinate Bench considering the decisions of the Hon’ble Supreme court in the case of UOI Vs. Ashish Agarwal (444 ITR 1) and Ram Balram Build Home (P) Ltd. Vs. ITO (171 taxmnan.com 99) held as under :-
“9.4 We find considerable force in the submission of the Ld. Counsel for the assessee. Perusal of page 176 of the Paper Book suggests that the assessee on 12.12.2020 itself intimated the AO about the liquidation of the assessee and appointment of liquidator of the assessee company. Page 178 of the Paper Book suggests that the assessee on 04.01.2021 through the liquidator Deepa Venkaraman submitted to the AO the requisite information called for in the assessment proceedings for AY 2018-19. Page 146 of the Paper Book which is the acknowledgement for processing the return for the AY 2019-20 dated 02.08.2020 clearly show that the return was processed and the liquidator was intimated through their mail id namely deepa@ksmaassociates.net. All these goes to show that the AO was intimated much prior to issue of notice u/s 148 about the liquidation proceedings, appointment of liquidator and also the e-mail id of the liquidator provided by the assessee and the liquidator also furnished information on behalf of the assessee in the assessment proceedings for AY 2018-19 before the Assessing Officer much prior to issue of notice u/s 148 dated 31.03.2021 for assessment year under consideration i.e. 2015-16. Therefore, the notice u/s 148 dated 31.03.2021 delivered or transmitted electronically to the assessee was after 31.03.2021 and not on or before 31.03.2021.
10. Thus, on careful perusal of the findings of the Ld. CIT(Appeals), we agree with the view of the Ld. CIT(A) that the notice u/s 148 dated 31.03.2021 was issued on 01.04.2021 and by virtue of the decision of the Hon’ble Supreme Court in the case of UOI vs. Ashish Agarwal (supra) and the decision of the Hon’ble Supreme Court in the case of UOI vs. Rajiv Bansal (supra) the AO ought to have issued notice u/s 148A(b) validating the earlier notice dated 31.3.2021 issued u/s 148 (pre-amended provisions) and followed the due process for completion of reassessment which the AO failed to do so and therefore the Ld. CIT(A) has rightly held that the notice which was issued on 01.04.2021 and not validated as per the decision of the Hon’ble Supreme Court in the case of UOI vs. Ashish Agarwal (supra) became invalid and consequently the reassessment framed based on such invalid notice was bad in law.
11. In so far as the contention of the Ld. DR that since the assessee has participated in the proceedings and therefore should not have questioned the notice u/s 148, in our view the provisions of section 292BB have no application since the issue here is when was the notice officially issued and communicated to Assessee and not the question of valid service of notice issued by the Department. Therefore, in our view the provisions of section 292BB have no application to the facts of the assessee’s case and the case law relied on by the Ld. DR has no application to the present situation. The notice which was issued to the assessee on 01.04.2021 became invalid by virtue of operation of law by the Hon’ble Supreme Court in the case of Ashish Agarwal and Rajiv Bansal as the AO did not follow the procedure laid down by the Hon’ble Supreme Court for completion of reassessment. Thus, we sustain the order of the Ld. CIT(A) and reject the grounds raised
by the Revenue.
12. Since we have upheld the order of the Ld. CIT(A) in holding that the notice was issued on 01.04.2021 and the said notice became invalid by virtue of operation of law by the decision of the Hon’ble Supreme Court as the said notice was not validated pursuant to the judgment of the Hon’ble Supreme Court in the case of Ashish Agarwal and therefore the notice is invalid and consequently the reassessment proceedings are bad in law, the contentions of the assessee in the application filed under Rule 27 of the ITAT Rules are left open at this stage and need not be adjudicated.
13. In the result, appeal of the Revenue is dismissed.”
The ratio of the above decisions squarely apply to the facts of the asessee’s case. Respectfully, requiring following, the said decision we hold that since the notice dated 31.03.2021 u/s.148 was issued after 01.04.2021 and since Page | 9 the said notice was not validated was pursuant to the decision of the Hon’ble Supreme court in the case of Ashish Agrwal, the assessment framed pursuant to such notice is bad in law and void ab initio. Consequently we quash the assessment framed u/s.143(3) read with Section 148 of the Act for the A.Y.2017- 18. Ground Nos.2 and 4 raised by the assessee are allowed.
Since we have quashed the assessment framed u/s.143 (3) r.w.s. 147, the appeal filed by the revenue against the order of the Ld. CIT(A) in deleting the addition made u/s. 69C of the Act becomes infructuous and accordingly the same is dismissed as infructuous.
In the result, the appeal of the assessee is partly allowed and appeal of the revenue is dismissed as infructuous. Order pronounced in the open court on 31.12.2025.