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Facts
The assessee's case was reopened for AY 2015-16 based on information regarding larger credits in the bank account. Notices under Section 148 were issued on 06.04.2021 and subsequently on 29.07.2022. The reassessment order was passed, and the CIT(A) dismissed the assessee's appeal.
Held
The Tribunal held that the notice issued u/s 148 after 1st April 2021 for AY 2015-16 is barred by limitation, considering the undertaking given by the ASG before the Supreme Court and the specific provisions related to TOLA. Consequently, the notice issued u/s 148 was quashed.
Key Issues
Whether the reassessment proceedings initiated under Section 148 for AY 2015-16, after 01.04.2021, are barred by limitation in light of the Supreme Court's pronouncements and the TOLA provisions.
Sections Cited
147, 144, 148, 148A, 149, 151
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘G’: NEW DELHI
(ASSESSMENT YEAR 2015-16) Mohd. Alam Quershi, Income Tax Officer, 0, Gol Kothi, Depduty Ganj, Ward-1(1), Moradabad-244001, Vs. Moradabad. Uttar Pradesh. PAN-AADPQ4002B (Appellant) (Respondent) Assessee by Shri Neeraj Jain, CA and Shri P.K. Mishra, CA Department by Shri Manish Gupta, Sr. DR 19.11.2025 Date of hearing Date of pronouncement 19.11.2025 O R D E R
PER MANISH AGARWAL, AM:
This appeal is filed by the assessee against the order of Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A) in short], dated 17.02.2025 in Appeal No. NFAC/2014-15/10282979 arising out of the assessment order passed u/s 147 r.w.s. 144 dated 19.05.2023 for Assessment Year 2015-16.
Brief facts of the case are that case of the assessee was reopened on the basis of information received that there were larger credits in the bank account of the assessee and there is mismatch in the income declared by the assessee and credits in the bank account and accordingly, notice u/s 148 was issued on 06.04.2021.
Mohd. Alam Qureshi vs. ITO Thereafter, in terms of the order of Hon’ble Supreme Court in the case of Union of India vs. Ashish Agarwal and Ors. in Civil Appeal No. 3005/2002, the said notice was treated as notice u/s 148A(2) of the Act. After passing the order u/s 148A(d) of the Act, a fresh notice u/s 148 was issued on 29.07.2022. In response, the assessee filed the return on 28.08.2022 declaring total income of Rs. 3,90,230/-. The assessment was completed u/s 147 r.w.s. 144B at an income of Rs. 58,64,382/- by making addition of Rs. 54,74,132/-.
Against the said order, the assessee filed an appeal before the Ld. CIT(A) who dismissed the appeal of the assessee.
4 Aggrieved by the said order, the assessee is in appeal before the Tribunal.
The appeal filed by the assessee is delayed by 49 days for which an application for condonation of delay was filed. As per said petition, it was stated that the assessee was engaged one Chartered Accountant for filing the appeal before the Ld. CIT(A) and was in continuous touch with the Counsel to find out the progress in the appeal. When in the month of April, the assessee approached the counsel, it was stated by that appeal was decided against the assessee and, further appeal is to be filed after payment of fees of Rs.10,000/-. Accordingly, the assessee has deposited appeal fees of Rs. 10,000/- on 21.04.2025 however, the appeal could only be filed on 18.06.2025 as the Counsel had got ill and could not filed appeal in time. In this respect, an affidavit was also filed re-affirming these facts and requested that delay be condoned and appeal be admitted. After considering the submissions of both parties, we finds that the reasons stated in the petition have not been found to be false and it is also a matter of fact that the assessee would not gain anything by filing the appeal late.
Mohd. Alam Qureshi vs. ITO There is no mala fide imputable to the assessee. Accordingly, we condoned the delay in the instant appeal and admit the same for adjudication.
Before us, ld. AR for the assessee submits that first notice for reopening u/s 148 of the Act was issued on 06.04.2021 and thereafter in terms of the procedure laid down by the Hon’ble Supreme Court in the case of Union of India vs. Ashish Agarwal (supra), the said notice was treated as the notice issued u/s 148A(b) of the Act. Thereafter the order u/s 148A(d) was passed and fresh notice u/s 148 was issued on 29.07.2022. In the case of Rajiv Bansal vs. Union of India reported in [2024] 469 ITR 46 (SC), the Hon’ble Supreme Court in para 19 has observed that the Revenue has accepted that no notice was issued for reopening for Assessment Year 2015-16, however, the case of the assessee was reopened, accordingly, it is prayed that the notice issued u/s 148 is contrary to the undertaking given by the government before the Hon’ble Supreme Court and consequent reassessment order passed u/s 147 be quashed. Reliance is further placed on the following judgments: 1. UOI Vs. Rajeev Bansal (2024) 469 ITR 46 (SC) 2. IBIBO Group Private Ltd. Vs. ACIT in Delhi High Court order dated 13.12.2024 in W.P. (C) 17639/2022 3. Makemytrip India Private Limited Vs. DCIT In Delhi High Court order dated 24.03.2025 in W.P. (C) 2557/2023 4. Sunita Salhotra Vs. ITO 5. Guru Charan Singh VS. ITO in and 2847/Del/2025 6. Deepak Agarwal Vs. DCIT in
Seema Goel Vs. CIT(A) Delhi ITA No. 2005/Del/2025 7. On the other hand, the Ld. Sr. DR supports the order of lower authorities and submits that order was passed in accordance with law.
Heard both the parties and perused the material available on record. Admittedly in the instant case, the first notice issued u/s 148 of the Act was issued on 6th April, 2021. As stated above, the Hon’ble Supreme Court in the case of Union Mohd. Alam Qureshi vs. ITO of India vs. Ashish Agarwal (supra) has held that the notice issued u/s 148 after 1.4.2021 would be deemed to be issued u/s 148A(b) to initiate the proceedings as per amended provisions u/s 148A of the Act. Thereafter, the order u/s 148A(d) was passed and then notice u/s 148 was issued on 29.07.2022 to the assessee. The Hon’ble Supreme Court in the case of Rajiv Bansal (supra) in para 9 of the order has observed that the ASG appearing on behalf of Revenue has given an undertaking that no notice u/s 148 would be issued for Assessment Year 2015-16. The relevant observations as contained in para 19 of the said order as under: “19. Mr. N. Venkataraman, learned Additional Solicitor General of India, made the following submissions on behalf of the Revenue: a. Parliament enacted TOLA as a free-standing legislation to provide relief and relaxation to both the assesses and the Revenue during the time of COVID-19. TOLA seeks to relax actions and proceedings that could not be completed or complied with within the original time limits specified under the Income Tax Act; b. Section 149 of the new regime provides three crucial be nefits to the assesses: (i) the four-year time limit for all situations has been reduced to three years; (ii) the first proviso to Section 149 ensures that re- assessment for previous assessment years cannot be undertaken beyond six years; and (iii) the monetary threshold of Rupees fifty lakhs will apply to the re-assessment for previous assessment years; c. The relaxations provided under Section 3(1) of TOLA apply "notwithstanding anything contained in the specified Act." Section 3(1), therefore, overrides the time limits for issuing a notice under Section 148 read with Section 149 of the Income Tax Act; d. TOLA does not extend the life of the old regime. It merely provides a relaxation for the completion or compliance of actions following the procedure laid down under the new regime; e. The Finance Act 2021 substituted the old regime for re-assessment with a new regime. The first proviso to Section 149 does not expressly bar the application of TOLA. Section 3 of TOLA applies to the entire Income Tax Act, Including Sections 149 and 151 of the new regime. Once the first proviso to Section 149(1)(b) is read with TOLA, then all the notices issued between 1 April 2021 and 30 June 2021 pertaining Mohd. Alam Qureshi vs. ITO to assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017, and 2017-2018 will be within the period of limitation as explained in the tabulation below: Assessment Within 3 Expiry of Within six Expiry of year Years Limitation Years Limitation (1) (2) read with (4) read with TOLA for (2) TOLA for (4) (3) (5) 2013-2014 31.03.2017 TOLA not 31.03.2020 30.06.2021 applicable 2014-2015 31.03.2018 TOLA not 31.03.2021 30.06.2021 applicable 2015-2016 31.03.2019 TOLA not 31.03.2022 TOLA not applicable applicable 2016-2017 31.03.2020 30.06.2021 31.03.2023 TOLA not applicable 2017-2018 31.03.2021 30.06.2021 31.03.2024 TOLA not applicable f. The Revenue concedes that for the assessment year 2015-16, all notices issued on or after 1 April 2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA; g. Section 2 of TOLA defines "specified Act" to mean and include the Income Tax Act. The new regime, which came into effect on 1 April 2021, is now part of the Income Tax Act. Therefore, TOLA continues to apply to the Income Tax Act even after 1 April 2021; and h. Ashish Agarwal (supra) treated Section 148 notices issued by the Revenue between 1 April 2021 and 30 June 2021 as show-cause notices in terms of Section 148A(b). Thereafter, the Revenue issued notices under Section 148 of the new regime between July and August 2022. Invalidation of the Section 148 notices issued under the new regime on the ground that they were issued beyond the time limit specified under the Income Tax Act read with TOLA will completely frustrate the judicial exercise undertaken by this Court in Ashish Agarwal (supra).
As per the aforesaid judgement and considering the fact that the assessment year involved in present appeal is AY 2015-16 and notice u/s 148 was originally issued on 06.04.2021 and later on 29.07.2022 and both the dates are falling on or Mohd. Alam Qureshi vs. ITO after 1st April, 2021, therefore, the reassessment proceedings initiated u/s 148 of the Act deserves to be dropped in view of the undertaking given by the ASG on behalf of the Revenue before the Hon’ble Supreme Court. Further, for Assessment Year 2015-16, no notice u/s 148 of the Act could be issued after the expiring of six years from the end of the relevant assessment year which limitation expired on 31st March, 2022. As the Hon’ble Supreme Court in the case of Rajiv Bansal (supra) has held that TOLA is not applicable for AY 2015-16, therefore, even otherwise under the old provisions of section 149 of the Act, the notice issued u/s 148 of the Act for Asst. Year 2015-16 on 25/07/2022 is barred by limitation. In view of these facts, the notice issued u/s 148 of the Act dated 29/07/2022 is hereby quashed. Accordingly, legal ground taken by the assessee is allowed.