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Income Tax Appellate Tribunal, DELHI BENCH ‘E’: NEW DELHI
Before: SHRI S. RIFAUR RAHMAN & SHRI YOGESH KUMAR U.S.
Order
: 24.09.2025 O R D E R
PER S.RIFAUR RAHMAN, ACCOUNTANT MEMBER :
This appeal is filed by the assessee against the order of ld. Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), New Delhi [“ld. CIT(A)”, for short] dated 30.12.2024 for Assessment Year 2016-17.
2. At the time of hearing, it is noticed that the assessee has filed the condonation of delay application, which is placed at page 10-11 of the paper book and it is mentioned in the said application that there was a delay of 11 days in filing the appeal. In the application, it is submitted that the said impugned order dated 30.12.2024 was never served on the assessee and only served through email on incorrect email id. It is submitted that since email id used for communicating the order as well as notices were of old disengaged counsel, communication could not be made to the assessee in time due to which appeal could not be filed on time and also filed an affidavit of the assessee along with the condonation application. Accordingly, it is submitted that the delay in filing of appeal is unintentional, bona fide and the assessee was prevented from sufficient cause and prayed that the delay in filing the appeal may be condoned. Ld. DR has not expressed any serious objection to the same.
We have heard both the counsels on the issue of condonation of delay. In our considered opinion, there was a reasonable cause for the delay in filing the appeal. Therefore, we condone the delay in filing the appeal before the Tribunal.
4. At the time of hearing, ld. AR of the assessee brought to our notice list of relevant dates for consideration which are reproduced below :- “1. Short list of dates :- a) 27.10.2016: Return of Rs.12,06,910/- was filed having acknowledgement no.521868320271016. b) 01.06.2021: Notice u/s 148 under old law issued upon assessee on dated 01.06.2021. c) 22.05.2022: First Show Cause notice u/s 148A(b) issued upon assessee on dated 22.05.2022 d) 06.06.2022: Detailed reply filed in response to SCN u/s 148A(b) e) 16.07.2022: Second show cause notice u/s 148A(b) issued upon assessee along with insight portal information, details of beneficiaries & enquiry report in case of M/s Yamini Investment Company Ltd. f) 26.07.2022: Again detailed reply filed in response to SCN u/s 148A(b) g) 30.07.2022: Order u/s 148A(d) passed on dated 30.07.2022 h) 30.07.2022: Notice u/s 148 issued on dated 30.07.2022 i) 17.08.2022: ITR filed in response to notice u/s 148 j) 03.01.2023: Notice u/s 143(2) was issued & served upon assessee. k) 13.01.2023: Notices u/s 142(1) were issued upon assessee seeking details as per questionnaire issued. l) 28.01.2023: Replies were filed during assessment proceedings with exhaustive evidence of: (i) Detailed reply along with relevant attachment. (ii) Computation of Total income. (iii) Contract note. (iv) Detailed reply filed in response to SCN 148A(b) along with relevant attachment m) 24.04.2023: Final SCN u/s 147 was issued why whole of sale consideration of sale of shares Rs 2,25,71,243/- claimed as exempt LTCG income may not be treated as unaccounted income in your case u/s 69A of the Act and Rs.11,03,562/- as commission @5% u/s 69C of the Act. n) 12.05.2023: Impugned assessment order has been passed u/s 147/144B with income of Rs.2,48,81,710/- (with adhoc addition of Rs.2,25,71,243/- as unaccounted income in your case u/s 69A of the Act and Rs.11,03,562/- as commission @5% u/s 69C of the Act in returned income of Rs.12,06,910/-) on account of sale of share of the listed company. o) In first appeal impugned order, assessee appeal was dismissed very unsympathetically rejecting on mere 12 days delay even explained and pleaded with bonafide and medical condition of the appellant. Although submission on legal ground of invalid approval u/s 151 as covered by the Supreme Court decision in case of UOI vs Rajeev Bansal is filed on 15/11/2024 with covered matter note and humbly requested to dispose the appeal as fully covered on legal ground.”
Before us, ld. AR submitted that the notice under section 148 of the Income- tax Act, was issued to the assessee dated 30.07.2022 with the approval of ld. PCIT, Delhi-15 and the same is placed at pages 5 & 6 of the paper book. Ld. AR submitted that the approval should have been obtained only from PCCIT as per the amended section 151 (ii) of the Act. Since the notice for reassessment was issued on 30.07.2022 for the AY 2016-17, the amended provisions is applicable. In this regard, he relied on the decision of Hon’ble Supreme Court in the case of UOI vs. Rajeev Bansal (2024) 167 taxmann.com 70. He also relied on the decision of Hon’ble Delhi High Court in the case of Rajesh Gupta HUF vs. ACIT in WPC No.6057/2023 order dated 03.03.2025 and also relied on other decisions of coordinate Benches.
On the other hand, ld. DR of the Revenue relied on the CBDT Circular and order of the lower authorities. The ld. DR of the Revenue filed the written submissions which are reproduce below :- “Subject: Implementation of the judgment of the Hon'ble Supreme Court dated 04.05.2022 (2022 SCC Online SC 543) (Union of India v. Ashish Agarwal) - Instruction regarding 1. Hon’ble Supreme Court. vide its judgment elated 04.05.2022 (2022 SCC Online SC 543). in the case of Union of India v. Ashish Agarwal has adjudicated on the validity of the issue of reassessment notices issued by the Assessing Officers during the period beginning on I SI April, 2021 and ending with so" June 2021, within the time extended by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act. 2020 [hereinafter referred to as "TOLA"] and various notification issued thereunder (these reassessment notices hereinafter referred to as "extended reassessment notices').
These extended reassessment notices were issued by the Assessing Officers under the provision of section 148 of the Income-tax Act. 1961 (hereinafter referred to as "the Act") following the procedure prescribed under various sections pertaining 10 reassessment namely sections 147 to 151, as they existed prior to their amendment by the Finance Act. 2021 (hereinafter referred to as "old law"). With effect from ISI April 2021, the old law has been substituted with new sections 147-151 (hereinafter referred to as the "new law ").
3. Hon'ble Supreme Court has held that these extended reassessment notices issued under the old law shall be deemed to be the show cause notices issued under clause (b) of section 148A of the new law and has directed Assessing Officers to follow the procedure with respect to such notices. It has also held that all the defences available to assessees under section 149 of the new law and whatever rights are available to the Assessing Officer under the new law shall continue to be available. Hon'ble Supreme Court has passed this order in exercise of its power under Article 142 of the Constitution of India.
The implementation of the judgment of Hon'ble Supreme Court is required to be done in a uniform manner. Accordingly, in exercise of its power under section 119 of the Act, the Central Board of Direct Taxes (hereinafter referred to as "the Board ') directs that the following may be taken into consideration while implementing this judgment. 5.0 Scope of the judgment: 5.1 Taking into account the decision of the Hon'ble Supreme Court in various paragraphs, it is clarified that the judgment applies to all cases where extended reassessment notices have been issued. This is irrespective of the fact whether such notices have been challenged or not. 6.0 Operation of the new section 149 of the Act to identify cases where fresh notice under section t 48 of the Act can be issued: 6.1 With respect of operation of new section 149 of the Act, the following may be seen: Hon'ble Supreme Court has held that the new law shall operate and all the defences available to assessees under section 149 of the new law and whatever rights are available to the Assessing Officer under the new law shall continue to be available. Sub-section (I) or new section 149 of the ct a amended by the Finance Act, 2021 (before it amendment by the Finance Act. 2022) reads as under- 149. (1) No notice under section 148 shall be issued for the relevant assessment year.- (a) if three years have elapsed from the end of the relevant assessment year, unless the case/ails under clause (b): (b) if three years, but not more than ten years. have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income chargeable to fax, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more for that year:
Provided that no notice under section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 1st day of April, 2021, if such notice could not have been issued at that time on account of being beyond the lime limit specified under the provisions of clause (b) of sub-section (1) of this section, as they stood immediately before the commencement of the Finance Act, 2011: Hon'ble Supreme Court has upheld the view of High Courts that the benefit of new law shall be made available even in respect of proceedings relating to past assessment years. Decision of Hon'ble Supreme Court read with the time extension provided by TOLA will allow extended reassessment notices to travel back in time to their original date when such notices were to be issued and then new section 149 of the Act is to be applied at that point. 6.2 Based on above, the extended reassessment notices are to be dealt with a under: (i) AY 2013-14. A Y 2014-15 and A Y 2015-16: Fresh notice under section 148 of the Act can be issued in these cases, with the approval of the specified authority, only if the case fall under clause (b) of sub-section (1) of section 149 as amended by the Finance Act. 2021 and reproduced in paragraph 6.1 above. Specified authority under section 151 of the new law in this case shall be the authority prescribed under clause (ii) of that section. (ii) AY 16-17, AY 17-18: Fresh notice under section 148 can be issued in these cases, with the approval of the specified authority, under clause (a) of sub- section (1) of new section 149 of the Act. since they are within the period of three years from the end of the relevant assessment year. Specified authority under section 151 of the new law in this case shall be the authority prescribed under clause (i) of that section. 7.0 Cases where the Assessing Officer is required to provide the information and material relied upon within 30 days: 7.1 Hon'ble Supreme Court has directed that information and material is required to be provided in all cases within 30 days. However, it has also been noticed that notice cannot be issued in a case for AY 2013-14. AY 2014-15 and AY 2015-16, if the income escaping assessment, in that case for that year amounts to or is likely to amount to le than fifty lakh rupees. Hence, in order to reduce the compliance burden of assessees, it is clarified that information and material may not be provided in a case for AY 2013-14, AY 2014-15 and AY 2015-16, if the income escaping assessment, in that case for that year, amounts to or is likely to amount to less than fifty lakh rupees. Separate instruction shall be issued regarding procedure for disposing these cases. 8.0 Procedure required to be followed by the Assessing Officers to comply with the Supreme Court judgment:
8.1 The procedure required to be followed by the Jurisdictional Assessing Officer/Assessing Officer, in compliance with the order of the Hon'ble Supreme Court, is as under: The extended reassessment notices are deemed to be show cause notice under clause (b) of section J 48A of the Act in accordance with the judgment of Hon'ble Supreme Court. Therefore, all requirement of new law prior to that show cause notice shall be deemed to have been complied with. The Assessing Officer shall exclude cases as per clarification in paragraph 7.1 above. Within 30 days i.e, by 2nd June 2022, the Assessing Officer shall provide to the assessees, in remaining cases the information and material relied upon for issuance of extended reassessment notices, The assessee has two weeks to reply a 10 why a notice under section 148 of the Act should not be issued, on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year. The time period of two weeks shall be counted from the date of last communication of' information and material by the Assessing Officer to the assessee. In view of the observation of Hon'ble Supreme Court that all the defences of the new law are available to the assessee, if assessee makes a request by making an application that more time be given to him to file reply to the show cause notice, then such a request shall be considered by the Assessing Officer on merit and time may be extended by the Assessing Officer as provided in clause (b) or new section 148A of the Act. After receiving the reply, the Assessing Officer shall decide on the basis of material available on record including reply or the assessee, whether or not it is a fit case to issue a notice Linder section 148 of the Act. The Assessing Officer is required to pass all order under clause (d) of section 148A of the Act to that effect, with the prior approval of the specified authority of tile new law. This order is required to be passed within one month from the end of the month in which the reply is received by him from the assessee, In case no such reply is furnished by the assessee, then the order is required to be passed within one month from the end of the month in which time or extended time allowed to furnish a reply expires. If it is a fit case to issue a notice under section 148 of' the Act the Assessing Officer shall serve on the assessee a notice under section 148 after obtaining the approval of the specified authority under section 151 of the new law. The copy of the order passed under clause (d) of section 148A of the Act shall also be served with the notice u/s 148.
If it is not a fit case to issue a notice under section 148 of the Act, the order passed under clause (d) of section 148A to that effect shall be served on the assessee.”
In rejoinder, ld. AR of the assessee submitted that the submissions of the ld. DR are considered and all the issues raised by the ld. DR are already addressed by the Hon’ble High Courts and coordinate Benches.
Considered the rival submissions and material placed on record. We observe that notice u/s 148 was issued on 01.06.2021. Subsequently, further notices were issued u/s 148A (b) on various dates and on 30.07.2022 order u/s 148 was passed and immediately on the same day, notice u/s 148 was issued to the assessee. The relevant copy of the notice is placed on record and before us, ld. AR submitted that for issue of notice u/s 148, the Assessing Officer should have obtained approval from PCCIT as per the provisions of section 151(ii) of the Act. Whereas for initiating the proceedings, the Assessing Officer has obtained the prior approval from PCIT, Delhi-15 which is not as per the provisions of the Act. In this regard, he relied on the decision of Hon’ble Supreme Court in the case of Rajeev Bansal (supra) for the issue of applicability of the amended Act. Further he relied on the decision of Hon’ble Delhi High Court in the case of Rajesh Gupta HUF (supra) wherein the issue raised by the assessee are directly addressed and the same is reproduced below :- “5. In cases where reassessment is sought to be commenced after the lapse of three years from the end of the relevant A Y, undisputedly, it would be the Principal Chief Commissioner who would be liable to be recognised as being the competent authority. Viewed in that light, it is apparent that the reassessment action would not sustain. 6. Dealing with an identical question, we had in Abhinav Jindal HUF v. Commissioner of Income Tax and Ors reported in 2024 SCC OnLine Del 6585 Consequently, and for the aforesaid reasons, we find ourselves unable to sustain the reassessment action on this short score alone.”
Similar view was taken by various coordinate Benches in this regard 9. and ITAT, Delhi Bench in the case of Durga Agencies Pvt. Ltd. in order dated 27.08.2025 held as under :- “Considered the rival submissions and the material placed on record. We observed that the Notice dated 29.07.2022 issued u/s 148 of the Act is not a valid notice, as the approval was not granted by the specified authority i.e. Principal Chief Commissioner of Income Tax as mandated u/s 151(ii) We further observe that the impugned notice u/s 148 for AY 2017-18 was issued on 29.07.2022, after obtaining the approval Pr.CIT, Delhi i.e. beyond the period of three years from the end of the relevant assessment year and thus, in terms of sec.151(ii) of the Act, the same was required to be approved by the Principal Chief Commissioner or Principal Director General or where there is no such authority, by Chief Commissioner or Director General. We further observe that in the case of the assessee, the said notice u/s 148 was not issued with the prior approval of the Principal Chief Commissioner or any other authority specified u/s 151(ii) of the Act. In this regard, we find force from the judgment of Hon’ble Delhi High Court in the case of Communist Party of India (Marxist) (supra) wherein Hon’ble Delhi High Court relying on various judgments decided the issue in favour of the assessee as under :- “18. In view of the above, the order dated 29.07.2022 passed under section 148A(d) of the Act is not sustainable. Consequently, the subsequent proceedings, including the assessment order dated 23.05.2023, cannot be sustained. Accordingly, the impugned order passed under section 148A(d) of the Act, the notice issued under section 13\48 of the Act as well as the assessment order dated 23.05.2023 and the demand raised pursuant thereto, are hereby set aside.”
Respectfully following the above decisions, we are inclined to allow the grounds raised
by the assessee setting aside the assessment order.
11. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on this 24th day of September, 2025.