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Judgment
O R D E R
PER SANJAY AWASTHI, ACCOUNTANT MEMBER:
This appeal arises from order dated 12.11.2025, passed u/s 250 of the Income Tax Act, 1961 (hereafter as “the Act”), by Ld. CIT(A)-NFAC. In this case, the main contention raised by the assessee is that for the year under consideration, being AY 2015-16 any notice u/s 148 of the Act issued after 01.04.2021 would not be valid considering the submission of Ld. ASG on behalf of Revenue in the case of Union of India vs. Rajeev Bansal (SC) [2024] reported in 167 taxmann.com 70.
In this case, the assessee has suffered additions on account of deposits in cash etc. being treated u/s 69A and Section 69 of the Act. There is also an addition of allegedly undisclosed commission income. It is seen that the assessee has not specifically challenged the assumption of jurisdiction by the Ld. AO before the Ld. CIT(A). However, on merits the issues have been held against him and thereby the present appeal has been filed before us with grounds which not only challenge the findings in the impugned order but also challenge the assumption of jurisdiction by issuing a notice u/s 148 of the Act outside of the purview of law.
Before us the Ld. AR argued with the help of a paper book and brought to our notice the paragraph 19f in the case of Rajeev Bansal (supra) which is as under: -
“19.Mr. N Venkataraman, learned Additional Solicitor General of India, made the following submissions on behalf of the Revenue:
a)Parliament enacted TOLA as a free-standing legislation to provide relief and relaxation to both the assesses and the Revenue during the time of COVID- 19. TOLA seeks to relax actions and proceedings that could not be completed or complied with within the original time limit a specified under the Income-tax Act;
b)Section 149 of the new regime provides free crucial benefits to the assessee: (1) the four-year time limit for all situations has been reduced to three years; (ii) the first proviso to Section 149 ensures that re-assessment for previous assessment years cannot be undertaken beyond six years; and (ii) the monetary threshold of Rupees fifty lakhs will apply to the re assessment for previous assessment years;
c)The relaxations provided under section 3(1) of TOLA apply "notwithstanding anything contained in the specified Act." Section 3(1), therefore, overrides the time limits for issuing a notice under section 148 read with Section 149 of the Income-tax Act;
d)TOLA does not extend the life of the old regime. It merely provides a relaxation for the completion or compliance of actions following the procedure laid down under the new regime;
e)The Finance Act 2021 substituted the old regime for re-assessment with a new regime. The first proviso to Section 149 does not expressly bar the application of TOLA Section 3 of TOLA applies to the entire Income-tax Act, including Sections 149 and 151 of the new regime. Once the first proviso to Section 149(1)(6) is read with TOLA, then all the notices issued between 1 April 2021 and 30 June 2021 pertaining to assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017, and 2017-2018 will be within the period of limitation as explained in the tabulation below:
Assessment Year Within 3 years Expiry of Limitation read with TOLA for (2) Within six years Expiry of Limitation read with TOLA for (4) (1) (2) (3) (4) (5) 2013-14 31.03.2017 TOLA not applicable 31.03.2020 30.06.2021 2014-15 31.03.2018 TOLA not applicable 31.03.2021 30.06.2021 2015-16 31.03.2019 TOLA not applicable 31.03.2022 TOLA not applicable 2016-17 31.03.2020 30.06.2021 31.03.2023 TOLA not applicable 2017-18 31.03.2021 30.06.2021 31.03.2024 TOLA not applicable f)The Revenue concedes that for the assessment year 2015-16, all notices issued on or after | April 2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA; [Emphasis added]
g)Section 2 of TOLA defines "specified Act" to mean and include the Income-tax Act. The new regime, which came into effect on 1 April 2021, is now part of the Income-tax Act. Therefore, TOLA continues to apply to the Income Tax Act even after 1 April 2021; and
h)Ashish Agarwal (supra) treated Section 148 notices issued by the Revenue between 1 April 2021 and 30 June 2021 as show cause notices in terms of Section 148A(6). Thereafter, the Revenue issued notices under section 148 of the new regime between July and August 2022. Invalidation of the Section 148 notices issued under the new regime on the ground that they were issued beyond the time limit specified under the Income-tax Act read with TOLA will completely frustrate the judicial exercise undertaken by this Court in Ashish Agarwal (supra).”
It was pointed out that the notice u/s 148 of the Act has actually been issued on 03.04.2022 and thus, was clearly beyond the limit mentioned by the Ld. ASG before the Hon’ble Supreme Court as per para 19f (supra).
The Ld. AR relied on the orders of the authorities below.
We have considered the submissions and have gone through the documents before us. We have also carefully perused the judgment of the Hon’ble Supreme Court in the case of Rajeev Bansal (supra). We find that this case would need to be decided in favour of the assessee since all notices u/s 148 of the Act issued after 01.04.2021 would need to be held to be invalid in the eyes of law. Accordingly, we quash the impugned notice issued u/s 148 of the Act issued on 03.04.2022. Consequently, the subsequent proceedings are also held to be invalid.
In the result, appeal of the assessee is allowed.