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Facts
The assessee filed an appeal against the order of the CIT(Appeals) sustaining additions/disallowances for AY 2013-14. The assessee also raised an additional ground challenging the limitation of the notice issued u/s 148.
Held
The Tribunal held that the notice issued u/s 148 and the order passed u/s 148A(d) were beyond the surviving time limit, thus barred by limitation. Consequently, the reassessment was quashed.
Key Issues
Whether the notice u/s 148 and the order u/s 148A(d) for reassessment were issued within the prescribed period of limitation, considering the various provisos and extensions under the Act and TOLA.
Sections Cited
147, 148, 148A, 149, 143(3)
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Income Tax Appellate Tribunal, DELHI BENCH “G” NEW DELHI
Before: SHRI CHALLA NAGENDRA PRASAD & SHRI M BALAGANESH
सुनवाईक�तारीख/ Date of hearing: 25.08.2025 27.10.2025 उ�ोषणाक�तारीख/Pronouncement on आदेश /O R D E R PER C.N. PRASAD, J.M.
This appeal is filed by the Assessee against the order of the Ld. CIT(Appeals)-NFAC, Delhi in sustaining the various additions/disallowances made by NFAC for the AY 2013-14.
Assessee raised the additional ground challenging the limitation of the notice issued u/s 148 as barred by limitation. The additional grounds are as under: - 1 SEHDEV GUPTA (i) “That the impugned reassessment order dated 22.05.2023 passed by the Respondent u/s 147 r.w.s. 144B of the Income Tax Act, 1961 is premised on the proceedings that were time barred and hence without jurisdiction and liable to be quashed.
(ii) That the notice dated 26.07.2022 issued u/s 148 of the Act seeking reassessment for AY 2013-14 is barred by limitation as per 1st proviso to section 149 of the Act, as interpreted by the Hon’ble Supreme Court in Union of India vs. Ashish Agarwal 444 ITR 1 and Union of India vs. Rajeev Bansal 469 ITR 46.
(iii) That the surviving period after considering all exclusions as per the ratio of decision in Rajeev Bansal (supra) and as per 4th proviso to section 149, was 7 days which expired on 09.06.2022.
(iv) That pursuant to expiry of limitation on 09.06.2022, the Respondent ceased to have jurisdiction to issue notice u/s 148 of the Act for AY 2013-14 vide Ram Balram Buildhome (P) Ltd. vs. ITO; 477 ITR 133 and Kanwaljeet Kaur vs. ACIT [2025] 171 taxmann.com 174 (Delhi).
The Appellant craves leave to add, amend, or withdraw any of the above additional grounds at the time of hearing. PRAYER It is therefore most respectfully prayed that the Hon’ble Tribunal may kindly be pleased to: (i) Admit the above mentioned additional grounds of appeal; and (ii) Pass such other orders as may be deemed just and proper in the facts and circumstances of the case. (iii) To grant any further relief that this Ld. Tribunal may deem fit in the interest of justice and equity. AND FOR THIS ACT OF KINDESS, THE APPELLANT AS IN DUTY BOUND SHALL EVERY PRAY.” is purely a legal ground and do not require further investigation of new facts other than those already available on record. Placing reliance on the decision of the Hon’ble Supreme Court in the case of National Thermal Power Corporation Ltd., NTPC vs. CIT (229 ITR 383) submitted that the legal ground can be raised for the first time before the Tribunal especially where the issue in additional ground goes to the root of the matter.
4. On hearing both the sides the additional ground filed by the assessee is admitted since it is purely a legal ground going to the root of the very validity of the assessment framed u/s 143(3) r.w.s. 148 of the Act.
5. Coming to the additional grounds Counsel for the Assessee made submissions as under: -
“MOST RESPECTFULLY SHOWETH:
1. 1. That the present appeal was listed and heard before this Hon’ble Tribunal on 25.08.2025, while the orders reserved.
2. That while admitting the additional legal ground of the Appellant, this Hon’ble Tribunal was pleased to direct the Appellant to submit a date chart summarizing the sequence of events premised on the ratio of the Hon’ble Supreme Court in Union of India vs. Ashish Agarwal: 444 ITR 1 and Union of India vs. Rajeev Bansal: 469 ITR 46 and their applicability to the present case of the Appellant.
In this regard, it is respectfully submitted as under:
Date Events & Particulars 30.06.2021 Notice u/s 148 of the Act for AY 2013- 14 (as per erstwhile reassessment provisions) 04.05.2022 Judgment of the SC in Ashish Agarwal (supra) [Notices u/s 148 of the unamended Act issued between 01.04.2021 to 30.06.2021 deemed to be construed as show cause notice u/s 148A(b) of the Act] 18.05.2022 Show cause notice (SCN) u/s 148A(b) of the Act, conveying reasons for reopening and providing underlying material/documents [as per mandate of Ashish Agarwal (supra)] 01.06.2022 Reply filed by Petitioner in response to SCN u/s 148A(b) of the Act 02.06.2022 Two weeks elapsed from issuance of SCN u/s 148A(b) of the Act (excluded in terms of 3rd proviso to section 149 of the Act) 09.06.2022 Additional period of 7 days elapsed (excluded in terms of 4th proviso to section 149 of the Act) 09.06.2022 Surviving time limit under the Act read with the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 (‘TOLA’) expires (since Section 148 notice under the erstwhile law is dated 30.06.2021) 26.07.2022 Order passed u/s 148A(d) of the Act 26.07.2022 Notice issued u/s 148 of the Act 11.05.2023 SCN issued u/s 147 of the Act 22.05.2023 Order u/s 147 of the Act
In terms of the decisions in Ashish Agarwal and Rajeev Bansal (supra) the following position emerges in the context of the present case: (i) That the period for subject reassessment u/s 149 of the Act (under erstwhile law) is deemed to be extended till 30.06.2021 under TOLA. 4
(ii) That the notice dated 30.06.2021 would be deemed to be notice u/s 148A(b) of the Act.
(iii) That the surviving period for re-issuance of section 148 notice would be the remainder days of the TOLA extended period (viz., up till 30.06.2021), therefore ‘none/nil’ in the present case.
(iv) That the following period stands excluded: -01.04.2021 to 30.06.2021 : Provisions of Act read with TOLA extension - 01.07.2021 to 03.05.2022 : Period prior to adjudication by the SC
- 04.05.2022 to 18.05.2022 : Information/material & reasons for reopening furnished pursuant to SC directions in Ashish Agarwal (supra)
- Upto 02.06.2022 : period of two weeks to furnish response to SCN
That additionally, even after taking into consideration exclusion in terms the 3rd and 4th provisos to section 149 of the Act, the surviving period expires on 09.06.2022 in case of the Appellant, whereas the notice u/s 148 of the Act was issued on 26.07.2022 viz. after expiry of 47 days from the period of limitation prescribed under the Act read with TOLA.
6. Therefore, applying the ratio of the decisions in Ashish Agarwal and Rajeev Bansal (supra) in the context of the1st proviso to section 149 of the Act, the order u/s 148A(d) as well as the notice u/s 148 of the Act being issued on 26.07.2022 are barred by limitation.
As regards the contention of the DR that both the order u/s 148A(d) as well as notice u/s 148 of the Act (dated 26.07.2022) are issued within the prescribed period of one month from the end of the month in which reply to SCN is received, it is submitted that the same is devoid SEHDEV GUPTA of any merit since it does not take into consideration that proceedings u/s 148A of the Act are necessarily required to be completed within the period available for issuing notice u/s 148 of the Act, as prescribed u/s 149 of the Act.
That the Hon’ble Delhi High Court in case of Ram Balram Buildhome (P) ltd. vs. ITO: 477 ITR 133, held that the time available u/s 148A(d) was “necessarily truncated” and the same was required to be passed within the surviving period as per the ratio laid down by the SC in case of Rajeev Bansal (supra).”
After hearing both the sides and perusing the orders of the authorities below and the sequence of events narrated in the submissions, we find that the notice/order passed u/s 148A(d) was beyond the surviving time limit i.e. 09.06.2022. As per the decisions of the Hon’ble Supreme Court in the case of Ashish Aggarwal and Rajiv Bansal and also the decision of the Hon’ble Delhi High Court in the case of Ram Balram Buildhome Pvt. Ltd. vs. ITO (477 ITR 133), since the order passed u/s 148A(d) is beyond the stipulated period the consequential assessment made u/s 143(3) r.w.s. 147 of the Act for the AY 2013-14 is barred by limitation and the same is hereby quashed. The additional ground raised by the assessee is allowed.
7. Since we have quashed the reassessment by allowing the additional ground on legal issues all other grounds raised by the assessee in the appeal on merits as well as other technical issues need not be adjudicated and they are left open. 6 indicated above.
Order pronounced in the open court on 27.10.2025