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Income Tax Appellate Tribunal, DELHI
Before: SHRI YOGESH KUMAR U.S. & SHRI NAVEEN CHANDRA
PER YOGESH KUMAR, U.S. JM:
1. The above captioned Appeals are filed by the Assessee against the orders of Ld. Commissioner of Income Tax (Appeals)/national Faceless appeal Centre) Delhi (‘Ld. CIT(A)’/’ NFAC’ for short), dated 11/03/2025 for the Assessment Year 2013-14 and 2015-16 respectively.
The Ld. Counsel for the Assessee vehemently submitted that the notices issued u/s 148 of the Income Tax Act, 1961 ('Act' for short) in both the Assessment Years are barred by limitation and by relying on the Judgment of Hon'ble Supreme Court in the case of Union of India and others Vs. Rajeev Bansal [2024] SCC Online SC 2693, sought for quashing the assessment orders.
Per contra, the Ld. Departmental Representative submitted that Ground No. 1 of the Assessee regarding the contention that notices issued u/s 148 of the Act is barred by limitation is devoid of merit.
Further submitted that, issuing of the notice and the initiation of the assessment proceedings are well within the limitation prescribed under the Act, thus relying on the order of the Lower Authorities, sought for dismissal of the Appeal.
We have heard both the parties and perused the material available on record. It is the case of the Ld. Assessee's Representative that notices issued u/s 148 of the Act dated 19/07/2022 for Assessment Year 2013-14 and 2015-16 are barred by limitation in view of the Judgment of Hon'ble Supreme Court in the case of Rajeev Bansal (supra). The Hon'ble High Court of Delhi in the case of ADM Agro Industries Latur and Vizag (P.) Ltd. Vs. ACIT [2025] 174 taxmann.com 725 (Delhi), by considering Judgment of Hon'ble Supreme Court in the case of Union of India &Ors. v. Ashish Agarwal (supra) and other judicial precedents decided the similar issue in following manners:-
“4. In compliance with the directions issued by the Supreme Court in the case of Union of India &Ors. v. Ashish Agarwal (supra), the Assessing Officer [AO] provided information and material to the Assessee on 25.05.2022. The Assessee was granted two weeks’ time to respond to the said notice. The Assessee responded to the notice dated 25.05.2022 by a letter dated 09.06.2022.
5. The AO passed an order under Section 148A(d) of the Act on 19.07.2022. According to the Assessee, the same was beyond the period as stipulated for issuance of notice under Section 148 of the Act.
6. In the present case, the period of six years from the end of the assessment year for issuing a notice under Section 148 of the Act expired on 31.03.2020. Thus, in terms of Section 149 of the Act, a notice under Section 148 of the Act could not be issued. However, the said period was extended by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 [TOLA]. Consequently, the time limit for issuing such a notice was extended to 30.06.2021. The original notice under Section 148 of the Act was issued on 30.06.2021, which was the last date of expiry of the period of limitation.
As noted above, the said notice was deemed to be a notice under Section 148A(b) of the Act by virtue of the decision of the Supreme Court in Union of India &Ors. v. Ashish Agarwal (supra). The Supreme Court also granted further time to provide the material, which was required to accompany such notice. As explained by the Supreme Court in the case of Union of India v. Rajeev Bansal: 2024 SCC OnLine SC 2693, the period from the date of the issuance of the notice till 04.05.2022, the date on which the Supreme Court had rendered the decision in Union of India &Ors. v. Ashish Agarwal (supra), is required to be excluded. Additionally, the time provided till the date of providing the material, which should have accompanied a notice under Section 148A(b) of the Act, as well as the time available to the assessee to respond to the said notice is also required to be excluded by virtue of the Fourth Proviso to Section 149(1) of the Act, as applicable at the material time.
In the present case, the time period for issuance of notice under Section 148 of the Act expired on 16.06.2022. However, the impugned notice was issued on 20.07.2022, which is beyond the said period. Thus, the notice was beyond the period of limitation.
This court in Ram BalramBuildhome Pvt. Ltd. v. Income Tax Officer and Anr.: Neutral Citation No.: 2025:DHC:547-DB observed as under: -
“53. As is apparent from the plain language of the fourth proviso to Section 149(1) of the Act, it extends the period of limitation for issuing a notice under Section 148 of the Act so as to provide the AO a minimum of seven days to pass an order under Section 148A(d) of the Act. If the time available to the AO to decide whether it is a fit case for issuance of notice under Section 148 of the Act in terms of Section 148A(d) of the Act is less than seven days after excluding the period as provided under the third proviso, then the period of three years or ten years as prescribed is required to be extended by such period so as to make available to the AO at least seven days to pass an order under Section 148A(d) of the Act and issue a notice under Section 148 of the Act. Illustratively, if the show cause notice under Section 148A(b) of the Act is issued to an assessee, on the last date on which issuance of such a notice under Section 148 of the Act is permissible, that is, on the last day of expiry of three years from the end of the relevant assessment year or ten years from the end of the assessment year as the case may be, the time made available to the assessee to respond to a notice under Section 148A(b) of the Act (being a minimum of seven days but not exceeding thirty days as provided in the notice plus such further time as extended pursuant to an application), is required to be excluded for the calculation of the period of three years or ten years as the case may be. And, an additional period of seven days is made available for the AO to pass an order. Thus, the period of limitation in such case would be three years (after excluding the time provided to the assessee to respond to the notice under Section 148A(b) of the Act) and seven days, or a period of ten years (after excluding the time provided to the assessee to respond to the notice under Section 148A(b) of the Act) and seven days as the case may be.
It is obvious, that in such a case, the AO would not have a time for passing an order under Section 148A(d) of the Act as stipulated under the said Clause, that is, one month from the end of the month in which the assessee furnishes a reply to the notices issued under Section 148A(b) of the Act. As noted above, the AO is required to complete the entire procedure for issuance of notice under Section 148 of the Act within the period as prescribed under Section 149 of the Act. Plainly, if the AO is unable to complete such procedure within the period of limitation, the AO would cease to have the jurisdiction to issue such a notice. *** *** ***
Thus, in the facts of the present case, the last date for issuance of notice under Section 148 of the Act for AY 2013-14 under the statutory framework, as was existing prior to 01.04.2021 was 31.03.2020, that is, six years from the end of the relevant assessment year.
By virtue of Section 3(1) of TOLA time for completion of specified acts, which fell during the period 20.03.2020 to 31.12.2020 were extended till 30.06.20218. Thus, the notice dated 01.06.2021 was issued twenty-nine days prior to the expiry of period of limitation for issuing a notice under Section 148 of the Act as was extended by TOLA. As noted above, the period from 01.06.2021, the date of issuance of notice, and 04.05.2022, being the date of decision of the Supreme Court in Union of India &Ors. v. Ashish Agarwal is required to be excluded by virtue of the third proviso to Section 149(1) of the Act.
Additionally, the period from the date of decision in Union of India &Ors. v. Ashish Agarwal till the date of providing material, as required to the accompanied with a notice under Section 148A(b) of the Act, is required to be excluded. Thus, the period between
04.05.2022 to 30.05.2022, the date on which the AO had issued the notice under Section 148A(b) of the Act in furtherance of his earlier notice dated 01.06.2021, is also required to be excluded by virtue of the third proviso to Section 149(1) of the Act as held by the Supreme Court in Union of India &Ors. v. Rajeev Bansal.
In addition to the above, the time granted to the petitioner to respond to the notice dated 30.05.2022 – the period of two weeks – is also required to be excluded by virtue of the third proviso to Section 149(1) of the Act. The petitioner had furnished its response to the notice under Section 148A(b) of the Act on 13.06.2022. Thus, the period of limitation began running from that date.
As noted above, by virtue of TOLA, the AO had period of twenty- nine days limitation left on the date of commencement of the reassessment proceedings, which began on 01.06.2021, to issue a notice under Section 148 of the Act. The said notice was required to be accompanied by an order under Section 148A(d) of the Act. Thus, the AO was required to pass an order under Section 148A(d) of the Act within the said twenty-nine days notwithstanding the time stipulated under Section 148A(d) of the Act. This period expired on 12.07.2022.
Since the period of limitation, as provided under Section 149(1) of the Act, had expired prior to issuance of the impugned notice on 30.07.2022. The said is squarely beyond the period of limitation.”
Concededly, the said controversy is covered in favour of the Assessee by the decision of this court in Ram BalramBuildhome Pvt. Ltd. v. Income Tax Officer and Another (supra).
The present petition is, accordingly, allowed and all proceedings initiated pursuant thereto are set aside. The pending application is also disposed of.”
5. In the present case, the Ld. Counsel submitted the table computing the period of limitation as per the Judgment of Hon'ble Supreme Court in the case of Rajeev Bansal (supra), which has been followed by Hon'ble High Court of Delhi in the case of Ram Balram Build Home (P.) Ltd. (Supra) and ADM Agro Industries Lature and Vizag(P.) Ltd. (supra). The tables computing the period of limitation for both the Assessment Years are reproduced as under :-
A.Y 2013-14 S. No. Particulars Date 1 Notice issued under section 148 (old regime) 21.06.2021 2 Letter/Notice communicating information 29.05.2022 pursuant to SC decision in Ashish Agarwal reply to be filed by 15.06.2022 3 Reply filed by Assesse 15.06.2022 4 Order u/s 148A(d) 19.07.2022 5 Notice u/s 148 19.07.2022 6 High Court order passed in the case of 14.12.2022 Assessee wherein order passed under Section 148A(d) and notice under 7 Order passed under Section 148A(d) of the Act 19.07.2022 8 Notice issued under Section 148 of the ACT 19.07.2022 A.Y 2015-16 Dates Notice/Order 21.06.2021 Notice issued under section 148 (old regime) 22.05.2022 Notice u/s 148A(b) of the Act 15.06.2022 Response filed by the Assessee to notice issued u/s 148 A(b) of the Act 19.07.2022 Order u/s 148A(d) of the Act 19.07.2022 Order u/s 148 of the Act 06.05.2023 Assessment order u/s 147 r.w.s. 144 of the Act
As per the Judgment of Hon’ble Supreme Court decision in case of Rajeev Bansal (supra), the notice u/s 148 of the Act was required to be issued on or before 24/06/2022. Therefore, the noticesissued for Assessment Year 2013-14 and 2015-16 dated 19/07/2022are barred by limitation specified u/s 149 of the Act, consequently, the re- assessment proceedings initiated thereupon is hereby quashed.
In the result, Appeals of the Assessee are allowed.