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Judgment
ORDER
PER SUDHIR KUMAR, JUDICIAL MEMBER:
This appeal by the Revenue is directed against the order of the National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] vide order dated 24-1-.2025 pertaining to A.Y. 2017-18 arising out the assessment order dated 31.05.2023 u/s.147 of the Income-tax Act, 1961, (in short ‘the Act’). The assessee also filed the cross objection in the appeal.
The appeal of Revenue is time barred by 6 days. The Revenue has shown the sufficient cause for not filing the appeal within time. The delay is condoned and appeal is admitted for adjudication.
The Revenue has raised the following grounds in appeal:
1.On the facts and in the circumstances of the case and in law the learned CIT(A) has erred in deleting the addition of Rs.14,50,00,000/- made by the Assessing Officer under section 69A of the Income-tax Act 1961 without properly appreciating the fact that the assessee failed to satisfactorily prove the genuineness of the alleged gift creditworthiness of the donor and genuineness of the transaction.
2.The learned CIT(A) has erred in deleting the addition of Rs. 93,57,140/- made under section 69A on account of shares received without consideration ignoring the fact that the assessee failed to substantiate the sources of acquisition of the original shares by the deceased (Late Shri Shashvat Joshi) thereby making the origin of the transferred shares unexplained.
The brief facts of the case are that the assessee has filed return of income for A.Y.2017-18 on 05-08-2017 declaring total income of Rs.1,74,43,300/-. As per the information available with the department the assessee has sold unlisted shares of M/s Rajendra and Ursula Joshi Holdings Private Limited to the tune of Rs.6,55,00,000/-and introduced Share capital of Rs.10,87,49,990/- in the name of minor son i.e. Chinmaya Joshi in M/s Rajendra and Ursula Joshi Holdings Private Limited during the FY2016-17 relevant to AY2017-18. Notice under section 148 of the Act was issued on 30-06-2021 to the assessee. Again, a show cause notice under section 148A(b) of the Act dated 21-05-2022 was issued to the assessee. Subsequently order under section 148A(d) of the Act dated 27-07-2022 was passed and notice under section 148 of the Act dated 27-07-2022 was issued to the assessee. The Assessing Officer completed the assessment order after considering the submission filed by the assessee and made the additions of Rs.15,37,81,132/-under section 69A of the Act and the total income Rs. 17,12,24,432/-.
Aggrieved the order of the AO the assessee filed the appeal before the Ld. NFAC who vide his order dated 24-10-2025 allowed the appeal of the assessee. Being aggrieved the order of the Ld. NFAC the Revenue is in appeal before the Tribunal. The assessee also filed the cross objection in the appeal and stated legal issue. The Ld. AR of the assessee submitted that the assessee raised the legal issue which was raised before the Ld. NFAC but not decided by him. The legal issue raised by the assessee in cross objection in ground no.2 as under:
That on facts and circumstances of the case and in law the NFAC/CIT(A) failed to appreciate that the reassessment proceedings are barred by limitation in terms of the provisions of section 149 of the Act.
The Ld. AR of the assessee submitted that notice under section 148 of the Act dated 27-07-2022 is time barred. She also submitted that notice under section 148 of the Act in old regime was issued on 30-06-2021 for the A.Y. 2017-18 however due to introduction of new reassessment tax regime from 01-04-2021 and in the compliance of the Hon’ble Supreme Court Order in the case of Asish Agarwal [2022]444 ITR 1 SC notice dated 04-05-2022 under section 148A(b) of the Act was issued on 21-05-2022 and consequent order dated was passed under section 148A(d) of the Act on 27-07-2022 , subsequently notice under section 148 of the Act was issued on 27-07-2022. The case of the assessee relates to A.Y.2017-18 and the order was passed on 27-07-2022 and notice under section 148 of the Act was issued on 27-07-2022 after a period of three years form the end of the relevant Assessment Year.
In this regard she has submitted as under:
Assessment year 2017-18
First notice issued u/s 148 of the Act old Regime (PB page no 1) 30-06-2021 Extended deadline to issue notice u/s 148 of the Act old regime 30-06-2021As per TOLA and notification issued Surviving Time Limit 30-06-2021 Date of SC order in Ashish Agarwal’s case 04-05-2022 Date of providing information/notice u/s 148A(b) in pursuance of Ashish Agarwal (pg.2of PB) 21-05-2022 Time limit to file the reply as u/s 148A(b) i.e within 2 week 07-06-2022 Replied file by the assessee (pg.11-97) 02-06-2022 Time excluded as per Rajeev Bansal’s Case 30-06-2021-to 30-06-2021 Time that was available /left to issue notice u/s 148 AS TOLA limit 0days Extended time to be given as per fourth Proviso to section 149(1) 7days Time limit to issue notice u/s 148 as per section 149(as amended by Finance Act, 2021 and as per Rajeev Bansal’s case ) i.e. 7 days from 11-06-2022 Order passed under section u/s 148 A(d) 27-07-2022 27-07-2022 Notice u/s 148 of the Act with prior approval of Pr. CIT Delhi (pg.102-104of PB) 27-07-2022 Notice u/s 148issued with prior approval of Pr. CIT Delhi 27-07 2022
The Ld. AR submitted that 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 29-07-2022. 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 three years from the end of the relevant assessment year i.e 2017-18 with the prior approval of competent authority. In the present case the notice u/s 148 of the Act was issued on 27-07-2022 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 the written submission the assessee mentioned the case of Delhi Sports and Entertainment Private Limited v. DCIT W.P.(C ) 3152/2026 the Hon’ble Delhi High Court held as follows:
37.we therefore proceed to decide as to whether the notice dated 30-07-2022 issued under Section 148 of the Act of 1961 is beyond the limitation or not. In present case usual period of three years from the end of the relevant assessment year for issuing notice under section 148of the Act of 1961 expired on 31-03-2021(as the relevant AY is 2017-18). The said period was however extended by TOLA and consequently the time limit for issuing notice got extended up to 30-06-2021.
41.We therefore unhesitatingly hold that the present proceedings are barred by limitation also as per amended section 149(1) (a) since the fresh notice dated 30-07-2022 issued pursuant to the liberty given by the Hon’ble supreme Court in the case Ashish Agarwal (Supra) was beyond the surviving period set out I the Rajeev Bansal’s case (Supra), applicable for Ay2017-18…….. 47. As a concurrence of discussion foregoing, we are of the considered opinion that the notice dated 30-07-2022 issued under section 148 of the Act of 1961 had been issued beyond the period of limitation as the same at the best could have been issued on 21-06-2022 as explained in table mentioned in para no. 39 and the table in para no. 41 ibd.”
48.Since the notice dated 30-07-2022 is void -ab-initio, the subsequent and consequential proceedings, including the order under section 148A of the Act of 1961 dated 31-10-2023 the notice under section 148 of the Act of 1961 dated 31-10-2023 and the assessment order dated 05-12-2025 and notice of demand of even date having been issued in furtherance of or which are premised on such notice dated 30-07-2022 also fail and are hereby quashed.
Reliance also placed the decision in the case of Dhanraj Govindram Kela v. ITO [2025]177 taxmann. 194 Gujarat
The Ld. DR has submitted that assessee, has never raised this issue that the assessment, is time barred before the Ld.AO during the re-assessment proceedings. The notice was issued within time in the pursuant to the judgment of the Hon’ble Supreme Court in Union of India v. Ashish Agarwal after complying the all conditions. She relied the order of the Assessing Officer.
We have heard the parties and perused the material available on record. In view of the observation of 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 11-06-2022 and since, the notice u/s 148 of the Act was issued on 27-07-2022 the said notice is to be treated as time barred by limitation. In the present case notice u/s 148 of the Act was issued on 27-07-2022 i.e 3 years have lapsed from the end of the relevant assessment year. Respectfully following the decision of the Hon’ble Supreme Court, and Hon’ble Delhi High Court we allow the grounds raised in cross objection. As a result, the appeal of the Revenue is dismissed. The impugned reassessment order is quashed.
We allowed the cross objection of the assessee on legal ground the other grounds have become academic and keep them open for adjudication.
In the result the appeal of the Revenue is dismissed and the cross objection of the Assessee is allowed.