DEPUTY COMMISSIONER OF INCOME TAX, ROHTAK CIRCLE vs. RAVI PRAKASH AGGARWAL, DELHI

CO No.250/Del/2025 1. This appeal filed by the Revenue and Cross Objections by the Assessee are directed against the order dated 21.12.2023 passed by the Ld. Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi for the assessment year 2013-14.

Since the appeal and Cross Objection are inter-connected, hence, the same were heard together and disposed of by this common order for the sake of convenience.

At the time of hearing, ld. AR of the assessee submitted that assessee has filed the cross objections with a delay due to a combination of multiple unforeseen and unavoidable reasons. He submitted that the grounds of appeal

First we deal with Assessee’s Cross Objection No.250/Del/2025.

At the outset, ld. AR for the assessee stated that the assessee has raised jurisdictional issue in the cross objection by stating that the notice issued u/s 148 of the Income-tax Act, 1961 (for short ‘the Act’) on 31.03.2021 is barred by limitation as per Section 149 of the Act, and therefore, the reassessment proceedings deserve to be quashed as void ab initio.

Brief facts of the case are that the assessee had filed its return of income for the relevant assessment year 2013-14 on 24.9.2013 declaring total income at Rs.1,19,83,270/-. Subsequently, the case was reopened for verification under the Special Pilot Project on reversal trades in BSE Stock Options as credible information under Project Falcon was received from the office of the DGIT (Inv.), Mumbai through the Insight Portal under the High risk CRIU/VRU information regarding coordinated and pre-meditated trading on the BSE by engaging in reversal trades in illiquid stock options resulting in non-genuine business loss / gains to the beneficiary assessees and the present assessee was a party to such manipulation and the assessee had incurred a loss of Rs.4,75,56,600/- due to reversal trades in BSE Stock options as per SEBI. Accordingly, notice u/s. 148 of the Act was issued and served upon the assessee on 31.3.2021.

Aggrieved, assessee preferred an appeal before the Ld. CIT(A). In appeal, Ld. CIT(A) partly allowed the appeal of the assessee.

Aggrieved, Revenue has filed the Appeal and Assessee has filed its Cross Objection before us.

At the time of hearing, ld. AR for the assessee submitted that in this case notice u/s. 148 of the Act was issued on 31.03.2021. Ld. AR further stated that this notice is barred by limitation, in view of the provisions of section 149 and the decision of the Hon’ble Supreme Court in the case of UOI vs. Rajeev Bansal (Civil Appeal No. 8629 of 2024), the time limitation for issuance of notice u/s. 148 is not more than 6 years. In the present case, the relevant assessment year is 2013-14 and notice u/s. 148 of the Act is dated 31.3.2021 which is clearly beyond the period of 6 years. Ld. Counsel for the assessee drew our attention to the relevant para in the case of UOI vs. Rajeev Bansal (supra). When these facts were confronted, ld. Sr. DR stated that the notice is a valid notice in view of the decision of the Hon’ble Supreme Court in Civil Appeal No. 3055/2022 in the case of Union of India & others vs. Ashish Agarwal and others. When it was confronted to ld. Sr. DR that this issue has already CO No.250/Del/2025 been adjudicated by the Hon’ble Supreme Court finally in the case of Rajiv Bansal (supra), he has not controverted the same. The Hon’ble Supreme Court in the case of UOI vs. Rajeev Bansal (Supra) has observed as under:- “ Regarding period of limitation of issuance of statutory notice us 148 of the new law, it has been stated that in view of third proviso to section 149 of the new law, the period between date of issuance of original notice issued us 148 of the old law and due date or extended due date of filing of response to communication issued by assessing officer in pursuance of judgement of Hon'ble Apex Court in the case of UOI vs. Ashish Agarwal (Supra) shall be deemed to be excluded from the period of limitation for issuance of notice u/s 148 of the new law. Also, in view of fourth proviso to section 149 of the new law, in peculiar cases, where immediately after exclusion of said period to be excluded from the period of limitation for issuance of notice us 148 of the new law, the period available with assessing officer for issuance of notice u/s 148 of the new law is less than 7 days, then the assessing officer shall be legally allowed to issue such statutory notice within 7 days from the end of said exclusion Summarily, the surviving time period for issuance of valid notice u/s 148 of the new law, where original notice u/s 148 of the old law issued between 01.04.2021 to 30.06.2021 subsequently considered as show cause notice issued us 148A(b) of the new law in pursuance of judgement of Hon'ble Apex Court in the case of UOI vs. Ashish Agarwal (Supra), would be the time period CO No.250/Del/2025 between 30.06.2021 and the date of issuance of original notice u/s. 148 of the old law. And, where the aforesaid surviving period is less than 7 days, the same would be extended to 7 days. Thereby, such surviving period or extended surviving period shall be added to the due date or extended due date of filing response to communication issued in pursuance of judgement of Hon’ble Apex Court in the case of UOI vs. Ashish Agarwal (Supra) furnishing all material being relied upon by the Assessing Officer. 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.”

Considered the rival submissions and material placed on record. We find from the above that it is abundantly clear that notice u/s. 148 dated 31.03.2021 is beyond the limitation period of 6 years, hence, this issue is squarely covered by the decision of the Hon’ble Supreme Court of India in the case of UOI vs. Rajeev Bansal (supra). Accordingly, we hold that consequent reassessment and the order of the CIT(A) both are bad in law and therefore, the same are hereby quashed on this legal issue itself.

In the result, the cross objection filed by the assessee stands allowed.

With regard to Revenue’s appeal being is concerned, since we have already decided the Assessee’s cross objection on the legal issue in favour of the Assessee by quashing the reassessment CO No.250/Del/2025 order and the consequent appellate order, as a result thereof, the issues raised in the Revenue’s appeal have become academic, hence, need not be adjudicated.

In the result, Assessee’s cross objection is allowed and Revenue’s appeal is dismissed as indicated above.