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Judgment
PER NAVEEN CHANDRA [A. M]:
The above captioned appeal is preferred by the assessee against the order dated 03.09.2025, passed by National Faceless Appeal Centre/Learned Commissioner of Income Tax(Appeals), New Delhi (hereinafter referred to as ‘ld. CIT(A)), under section 250 of the Income Tax Act, 1961 [hereinafter referred to as, “Act”] for Assessment Year 2013-14. The assessment order in this appeal is passed by the Assessing Officer [for short, AO] under section 147 of the Act.
The assessee has raised following grounds of appeal:-
1.For that on facts and in law, both the impugned assessment order dated 24.05.2019 ("First impugned order") passed u/s. 147 of the Income-tax Act, 1961 ("Act") for subject Assessment year 2013-14 ("Subject AY"), making impugned addition u/s. 68 of the Act amounting to Rs. 5,16,76,250/- and consequent impugned ex-parte order dated 03.09.2025 passed by the Ld. Commissioner of Income-tax (Appeals) (“CIT(A)") u/s. 250(6) of the Act ("Second impugned order") affirming the impugned assessment order are contrary to settled law, are illegal, untenable, and bad in law.
2.For that the impugned re-assessment order dated 24.05.2023 passed by the Respondent u/s 147 r.w.s. 144B of the Income Tax Act, 1961 (“the Act") is premised on the proceedings that were time barred and hence without jurisdiction and liable to be quashed.
3.For that notice dated 18.07.2022 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 for being outside the extended time limit granted as per Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 ("TOLA") as interpreted by the Hon'ble Supreme Court in Union of India v. Ashish Agarwal 444 ITR 1 and recently by Union of India v. Rajeev Bansal 469 ITR 46.
4.For that notice u/s. 148 of the Act is also time barred since the surviving period after considering all exclusions as per the ratio of decision in Rajeev Bansal (supra) and even after granting another 7 days as per 4th proviso to Section 149, the time limit to issue notice u/s. 148 of the Act expired on 08.07.2022.
5.That pursuant to expiry of limitation on 08.07.2022, the Respondent ceased to have jurisdiction to issue notice u/s 148 of the Act for AY 2016-17 vide Ram Balram Buildhome (P.) Ltd. v. ITO: 477 ITR 133 and Kanwaljeet Kaur v. ACIT [2025] 171 taxmann.com 174 (Delhi).
6.That the impugned ex-parte order dated 03.09.2025 passed by the Ld. CIT(A) is in gross violation of principles of natural justice, insofar as no effective opportunity is granted at all to the Appellant to present its case apart vide Swadeshi Cotton Mills Co. Ltd. v. Union of India, AIR 1981 SC 818.
7.For that the Ld. AO grossly failed to appreciate the cogent documentary evidences filed by the Appellant qua sale of 1,00,000 shares of a publicly listed company- M/s. Mahanivesh Investments Ltd. ("MIL") via banking channels and in de-mated form and erred in denying exemption u/s. 10(38) of the Act when all conditions vide Income-tax Officer vs. Mitesh Mehta HUF, [2025] 174 taxmann.com 241 (Mumbai - Trib.) [07-04-2025].
8.For that in a similar matter, the Ld. AO failed to follow its earlier stand vide assessment order u/s. 147 r.w.s. 144B of the Act dated 28.03.2023 рassed in the case of Vijay Gupta HUF (AAEHV3208D) for the same AY 2013-14, wherein on identical facts and circumstances, share transactions of the said Assessee qua the same company- Mahanivesh (India) Ltd (MIL) were accepted and no adverse inference was drawn.
9.For that the Ld. AO grossly erred in merely proceeding on a supposition that MIL share prices are manipulated/bogus, and failed to demonstrate any livelink via documentary evidences apart from conjectures, rendering the impugned (re)assessment proceedings non-est vide CNB Finwiz Ltd. vs. Deputy Commissioner of Income-tax [2025] 174 taxmann.com 918 (Delhi)[20- 05-2025].
10.That the Ld. CIT(A) completely failed to appreciate that the Ld. AO had reopened concluded assessment proceedings solely based on "information" from secondary sources and never himself conducted any verification, same being mere borrowed satisfaction vide Pr. CIT v. Meenakshi Overseas Pvt. Ltd., (2017) 395 ITR 677, violates the jurisdictional mandate of Section 148 of the Act, rendering the impugned assessment order as bad in law and liable to be quashed.
Brief facts of the case are that M/s Amit Gupta (HUF) (PAN: AAJHA2598E), has filed original return of income for the AY 2013-14 on 27.07.2013 declaring total income of Rs.1,05,280/-and had shown income from long term capital gain and other sources in its ITR. During the F.Y. 2012-13, the appellant had claimed exempt u/s. 10(38) of the I.T. Act in its ITR filed for the A.Y. 2013-14. However, the case was reopened and notice u/s 148 was issued to the appellant and in response, the appellant filed ROI on 23.09.2021.
The short issue in the case is that the notice issued u/s 148 is time-barred in view of the decision of the Hon’ble Supreme Court in the case of Rajeev Bansal vs Union of India in Civil appeal 8629/2024 dated 03.10.2024. The Ld. AR argued that the initial notice u/s 148 was issued on 08.06.2021 which as per the decision of the Hon’ble Supreme Court in the case of Ashish Aggarwal (2022 SCC Online SC 543) was considered as show cause notice. Thereafter, the AO initiated show cause u/s 148A(b) dated 25.05.2022 of the Act in response to which the assessee replied vide letter dated 09.06.2022. The AO passed order u/s 148A(d) and issued notice u/s 148 on 18.07.2022. The ld AR argued that in accordance with the decision of the Rajeev Bansal (supra), the surviving period, in which the AO had to issue notice u/s 148 from the date of the assessee’s furnishing reply to the show-cause notice, remained only 22 days. The Ld. AR argued that in the instant case, as the AO had only time till 01.07.2022 and since the notice u/s 148 was issued beyond the surviving period, the same will not survive.
Per contra, the Ld. DR has argued in the instant case that the serving period issue is not involved and distinguished the case of Rajeev Bansal by stating the case was on the basis of information from search.
We have heard the rival submissions and perused the material on record. The initial notice u/s 148 of the Act was issued on 08.06.2021 giving a surviving period, calculated according to the Rajeev Bansal decision, from date of issuance of deemed show cause notice till expiry of period as extended by TOLA (i.e., from 08.06.2021 to 30.06.2021), of 22 days. In response to the SCN dated 25.05.2022, the assessee filed its reply on 09.06.2022 which means the AO had to issue order u/s 148A(d) as well as notice u/s 148 within 22 days of filing of reply by the assessee i.e., by 01.07.2022. The AO however, issued notice u/s 148 on 18.07.2022. In such factual matrix of the instant case, the impugned notice u/s 148 being issued after the limitation period, cannot but be considered as barred by limitation and is liable to be quashed. We order accordingly and we also quash the assessment order emanating out of such notice u/s 148 of the Act. The grounds 2 of the assessee is allowed.
Since the appeal has been allowed on legal grounds, no adjudication is made on merits.
In the result, the grounds of the appeal raised by the assessee is partly allowed.