M/S KALADHAR IMPEX & TRADERS PVT. LTD,DELHI vs. INCOME TAX OFFICER WARD-14(1), DELHI
PER SUDHIR KUMAR JM:
The assessee preferred the appeal, challenging the order dated 13-
01-2025passed by National Faceless Appeal Centre Delhi (in short
NFAC) passed by the Assessing Officer for A.Y. 2014-15 under the section 147 and144 of the Income Tax Act, 1961(In short “the Act”).
Appellant by Ms. Prem Lata Bansal Sr. Advocate
Shri Shivang Bansal Advocate
Respondent by Sh. Om Prakash, Sr. DR
Date of hearing
26.08.2025
Date of pronouncement
17.09.2025
ITA no. 1446/Del/ 2025
2. The assessee has raised the legal grounds in appeal that the notice issued u/s 148 of the Act is barred by limitation. This goes to root the matter and hence, is taken up first for adjudication.
3. The brief facts of the case are that the assessee is a company, has filed the return of income by declaring income of Rs. 1,12,009/- on 29-
09-2014.The return was processed u/s 143(1) of the Act and intimation was received to the assessee. Subsequently information was received from the office of DDIT(Inv.) unit -8 (43) Delhi through Insight Portal of the department and same was analyzed. A survey action was conducted on 27-04-2028 on M/s Sarvroopey Vyapar Pvt.Ltd. at Dwarks and M/s Shashi sales marketing Pvt. Ltd., Astrol food Pvt. Ltd.
& rabik Export Ltd. Padama tower Rajendra place Delhi. During the course of survey proceedings, it was found that assessee have received the accommodation entries from M/s Ahy Foods Product Pvt Ltd.
Notice u/s 148 of the Act was issued to the assessee and assessee has filed the return on 06-08-2021 declaring the same as originally in the compliance of the notice. The assessee challenged the said notice before the Hon’ble High Court in W. P. ( C) N0. 9251 of 2021, and court was pleased to quash the notice vide order dated 15-12-202. The AO completed the assessment by making the additions.
Aggrieved the order of the AO the assessee preferred the appeal before the NFAC who vide order dated 13-01-2025 dismissed the ITA no. 1446/Del/ 2025 5. Ld. AR for the assessee has raised the legal issue and stated that the notice dated 23-07-2022 issued by AO u/s 148 of the Act is time barred. In this regard he has submitted as under : original notice u/s 148 of the Act was issued on 28-06-2021 Time remaining till 30-06-2021 2 days Letter issued by AO supplying information with reference to section 148A(b) in consequence to Hon’ble Supreme Court Order in Ashish Agarwal dated 04-05-2022 19-05-2022 & 21-05-2022 Replied filed before AO 13 -06-2022 Extended date by which notice should have 15-06-2022 been issued u/s 148 Order u/s 148 A(d) 20-07-2022 Notice u/s 148 of the Act 20-07-2022 6. In consequence to the directions issued by the Hon’ble Supreme court in the case of Union of India vs. Ashish Agarwal dated 04-05- 2022 the Assessing Officer issued the fresh notice u/s 148 of the Act on 20-07-2022. He further submitted that as per the section 149 of the Act the notice u/s 148 of the Act could be issued within a period of six years from the end of the relevant assessment year i.e 2014-2015. The limitation of issuing notice expired on 31-03-2021. In the present case the notice u/s 148 of the Act was issued on 20-07-2022 which is beyond time. Reliance has placed on the decisions of Union of India & Ors Vs. Rajeev Bansal 2024 (10) TMI 264 Supreme Court (LB) in this Case the Hon’ble Supreme Court held as under:
ITA no. 1446/Del/ 2025
“110. The effect of the creation of the legal fiction in Ashish Agarwal
(Supra) was that it stopped the clock of limitation with effect from the date of issuance of section 148 notices under the old regime {Which is also the date of issuance of the deemed notices}. As discussed in the preceding segment of the judgment, the period from the date of the issuance of the deemed notices till the supply of relevant information and material by the assessing officer to the assessee in terms of the direction issued by this court in Ashish Agarwal (Supra) has to be excluded from the computation of the period of limitation. Moreover, the period of two weeks granted to the assessee to reply to the cause notices must be excluded in terms of the third proviso to section 149. 111. The clock started ticking for the Revenue only after it received the response of the assessee to the show cause notices. After the receipt of the reply, the assessing officer had to perform the following responsibilities; (i) consider the reply of the assessee under section 149A(C );(ii) take a decision under section 149A(d ) ba on the available material and the reply of the assessee; and (iii) issue a notice under section 148 if it was a fit case for reassessment. Once the clock started ticking, the assessing officer was see State of AP v. AP
Pensioners Association, (2005) 13 SCC 161 [28]. [This court observed that the “legal fiction undoubtedly is to be construed in such a manner so as to enable a person, for whose benefit such legal fiction has been created, to obtain all consequences flowing there form.”]
PART F required to complete these procedures within the surviving time limit. The surviving time limit, as prescribed under the Income
ITA no. 1446/Del/ 2025
May 2021. After accounting for all the exclusions, the assessing officer will have sixty –one days [days between 1 May 2021 and 30 June
2021] to issue a notice under section 148 of the new regime. This time starts ticking for the assessing officer after receiving the response of the assessee. In this instance, if the assessee submits the response on 18 June 2022, the assessing officer will have sixty-One days from 18
June 202 to issue a reassessment notice under section 148 of the new regime. Thus, in this illustration, the time limit for issuance of a notice under section 148 of the new regime will end on 18 August 2022.”
7. In the above sited case, the revenue concedes that for the assessment year 2014-15, all notices issued on or after 1st April 2021
will have to be dropped as they will not fall for completion during the period prescribed under TOLA. Ld. AR also relied on the following decision:
i. ITO vs Pushpak Realities Pvt Ltd. ITA NO4812/Mum/2024 decided on 07-11-2024
The Ld. DR relied upon the orders of the lower authorities. 9. We have heard the revival contention of the parties and gone through the material available on record. In view of the observation of ITA no. 1446/Del/ 2025 the Hon’ble Supreme Court in the case of Rajeev Bansal (Supra) the extended due date for issuance of notice u/s 148 of the Act expired on 15-06-2022 and since, the notice is u/s 148 of the Act is issued on 20- 07-2022 the said notice is to be treated as time barred by limitation and consequentially reassessment proceedings would be liable to be quashed as void ab initio. Respectfully following the decision of the Hon’ble Supreme Court, we hold that the notice issued u/s 148 of the Act on 20-07-2022 is time barred by limitation. Accordingly the legal issue raised by the assessee is allowed. 10 Since we have decided the legal ground in favour of the assessee, the other grounds have become academic and keep them open for adjudication. 11. In the result the appeal of the assessee is allowed. Order pronounced in the open court on 17/09/2025. (MANISH AGARWAL) JUDICIALMEMBER Dated: 17th Sept, 2025 “Neha, Sr. PS”