Loading judgment…
Facts
The assessee filed a return of income, and a reassessment was completed based on Section 147 read with Section 144B of the Act, resulting in a significant addition. The assessee's appeal to the CIT(A) was dismissed.
Held
The Tribunal held that the notice issued under Section 148 of the Act was time-barred. Following the Supreme Court's decision in UOI vs. Rajeev Bansal, it was found that the notice was issued beyond the permissible 'surviving time'.
Key Issues
Whether the reassessment notice issued under Section 148 was time-barred, considering the relaxation provisions under TOLA and the Supreme Court's ruling in UOI vs. Rajeev Bansal.
Sections Cited
147, 144B, 148, 149(1)(a), 149(1)(b)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “SMC’’ : NEW DELHI
Before: SHRI MAHAVIR SINGH, HON’BLE
This appeal by the assessee is emanating from the order of the NFAC, Delhi in Appeal No. ITBA/NFAC/S/250/2025-26/1077481666(1) dated 23.06.2025 relating to assessment year 2017-18.
Heard both the sides and perused the records.
At the threshold, it is noted that there is delay of 1 day in filing the appeal before the Tribunal. Upon hearing the parties and perusing the records, I am of the considered view that reasonable cause has been attributed to the assessee in filing the appeal, hence, I condone the delay of 1 day and proceed further.
The assessee has raised as many as 10 Grounds of Appeal
, but Ld. AR has only argued only the following Ground no. 8 which is legal in nature:-
8. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of AO in passing the impugned reassessment order which is barred by limitation.”
5. The brief facts of the case are that the assessee filed her return of income declaring total income at Rs. 1,55,930/-. Thereafter, assessment u/s. 147 r.w.s. 144B of the Act has been completed on 29.05.2023 at assessed income of Rs. 19,18,430/- after making addition of Rs. 17,62,500/- to the returned income. Against the same, assessee preferred the appeal before the Ld. CIT(A) who dismissed the appeal of the assessee. Being aggrieved the order of the Ld.CIT(A)/ NFAC the assessee is in appeal before the Tribunal.
Ld. AR for the assessee has raised the legal issue and stated that the limitation proceedings are barred by limitation and thus void ab initio. It was submitted that the original notice u/s. 148 of the Act was issued on 29.06.2021 for AY 2017-18, relying on the relaxation under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA). It was further contended that alleged income escaped assessment is only Rs. 17,62,000/- i.e. less than Rs. 50 lacs, which falls within the three year time limit prescribed under section 149(1)(a) of the Act, because as per the provisions of Section 149(1)(b) (as amended by Finance Act, 2021), the permissible time limit for issuance of notice for AY 2017-18 expired on 31.03.2021. As per the directions issued by the Hon’ble Supreme Court in the case of UOI vs. Rajeev Bansal (Civil Appeal No. 8629 of 2024), it has been clarified that if the statutory period of three years from the end of the relevant assessment year was to expire within 20.03.2020 to 30.06.2021, then such notices issued under the old regime during that period shall be treated as valid if reissued under the new regime within the “surviving time”. Accordingly, in the present case, since the income escaped assessment is less than Rs. 50 lacs, the period of three years from the end of AY 2017-18 would fall within 20.03.2020 and 30.6.2021, and hence, the case squarely falls within the category governed by the Hon’ble Supreme Court’s decision in the case of UOI vs. Rajeev Bansal (supra). He submitted that the computation of surviving time is as under:- i) Date of notice u/s. 148 under TOLA : 29.06.2021 ii) Surviving period available till 30.06.2021 : 1 Day iii) Date of providing information till 30.06.2021 21.05.2022 iv) Due date of filing reply 06.06.2022 v) Date of reply filed by the assessee 06.06.2022 vi) Date of order u/s 148A(d) and notice u/s 148 26.07.2022 vii) Last permissible date as per ‘surviving time’ 07.06.2022 Since the fresh notice under section 148 was issued only on 26.07.2022 i.e., beyond the surviving period, the same is time-barred and therefore invalid order passed deserves to be annulled.
Ld. DR relied upon the orders of the authorities below.
I have heard the rival contentions and perused the records. I find considerable cogency in the contention of the Ld. AR that original notice u/s. 148 of the Act was issued on 29.06.2021 for AY 2017-18, relying on the relaxation under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) and the alleged income escaped assessment is only Rs. 17,62,000/- i.e. less than Rs. 50 lacs, which falls within the three year time limit prescribed under section 149(1)(a) of the Act, because as per the provisions of Section 149(1)(b) (as amended by Finance Act, 2021), the permissible time limit for issuance of notice for AY 2017-18 expired on 31.03.2021. This position has been clarified by the Hon’ble Supreme Court in the case of UOI vs. Rajeev Bansal (Civil Appeal No. 8629 of 2024), by clarifying that if the statutory period of three years from the end of the relevant assessment year was to expire within 20.03.2020 to 30.06.2021, then such notices issued under the old regime during that period shall be treated as valid if reissued under the new regime within the “surviving time”. Accordingly, in the present case, since the income escaped assessment is less than Rs. 50 lacs, the period of three years from the end of AY 2017-18 would fall within 20.03.2020 and 30.6.2021, and hence, the case squarely falls within the category governed by the Hon’ble Supreme Court’s decision in the case of UOI vs. Rajeev Bansal (supra). Respectfully following the decision of the Hon’ble Supreme Court, as aforesaid, I hold that the notice issued u/s 148 of the Act on 26-07-2022 is time barred by limitation and thus invalid and therefore, the same is quashed and accordingly, consequent reassessment also stand quashed. Accordingly the legal issue raised by the assessee is allowed.
Since we have decided the legal ground in favour of the assessee, the other grounds have become academic, hence, need not be adjudicated.