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Judgment
ORDER
PER NAVEEN CHANDRA, ACCOUNTANT MEMBER :
This captioned appeal has been filed by the Revenue against the order of the learned Commissioner of Income Tax (Appeals)-NFAC, Delhi [‘CIT(A)’ in short] dated 10.12.2025 arising from the re-assessment proceedings completed under section 147/143(3) for Assessment Year 2016-17.
Brief facts of the case are that the assessee filed Income Tax return on 14.09.2016 declaring total income of Rs. Nil & later on assessed u/s 143(3) on 30.12.2018 at income of Rs. 1,41,969/-. The NFAC has framed the re-assessment u/s 147/143(3) read with section 144B on an income of Rs. 68,59,375/- by making the following addition of Rs. 67,17,406/- as unexplained money u/s 69A of the Act on 27.05.2023. Aggrieved by the assessment order, assessee filed the appeal before the CIT(A). The learned CIT(A) quashed the re-assessment proceedings.
Aggrieved by the order of CIT(A), the Revenue is now in appeal before the ITAT with the following grounds of appeal :
1.“That on the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in quashing the reassessment proceedings initiated under section 147 of the Income-tax Act, 1961, by holding that the notice issued under section 148 by the Jurisdictional Assessing Officer was without jurisdiction.
2.That the learned CIT(A) has erred in law in holding that initiation of reassessment by the Jurisdictional Assessing Officer and completion of assessment by the Faceless Assessing Officer vitiates the entire reassessment proceedings, ignoring the statutory scheme of the Act and the fact that the faceless regime governs the procedure of assessment and does not divest the Jurisdictional Assessing Officer of powers conferred under sections 147 and 148 of the Act.
3.That the learned CIT(A) failed to appreciate that the Income-tax Act recognises only one Assessing Officer under section 2(7A), and that the faceless assessment mechanism is merely an internal administrative allocation of functions, which does not render the reassessment proceedings void.
4.That the learned CIT(A) has erred in treating an alleged procedural irregularity, if any. as a jurisdictional defect, contrary to settled principles of law that procedural defects do not invalidate proceedings in the absence of demonstrated prejudice to the assessee.
5.That the learned CIT(A) has erred in relying upon decisions of non-jurisdictional High Courts, including the Bombay High Court, while ignoring binding and persuasive judicial precedents of the Hon'ble Delhi High Court holding that the Jurisdictional Assessing Officer retains concurrent jurisdiction to initiate reassessment proceedings even after introduction of the faceless regime.
6.That the learned CIT(A) has erred in placing reliance on dismissal of a Special Leave Petition by the Hon'ble Supreme Court as laying down a binding precedent, without appreciating that dismissal of an SLP without a speaking order does not constitute declaration of law under Article 141 of the Constitution.
7.That the learned CIT(A) has failed to appreciate that the Special Leave Petition against the judgment of the Hon'ble Delhi High Court in T.K.S. Builders Pvt. Ltd. is pending before the Hon'ble Supreme Court and, in the absence of any stay, the said judgment continues to operate within the territorial jurisdiction of the Delhi High Court.
8.That the learned CIT(A) has erred in law in not adjudicating the addition of Rs.67,17,406/- made under section 69A of the Act on merits, despite the availability of material on record and the remand report, thereby violating the mandate of section 250(6) of the Act requiring a reasoned order on all grounds.
9.That the learned CIT(A) erred in holding that once the reassessment is on quashed jurisdictional grounds, the addition on merits automatically fails, without examining whether the assumption of jurisdiction was in fact invalid under the applicable legal framework prevailing in the jurisdiction of the Hon'ble Delhi High Court.
10.That the order of the learned CIT(A) is contrary to law, facts, and judicial precedents and has resulted in erroneous deletion of a validly made addition, leading to prejudice to the interests of the Revenue.
11.That the appellant craves leave to add, amend, alter or withdraw any of the above grounds of appeal at or before the time of hearing.”
In the instant case, challenge is with regard to validity of the notice issued u/s 148 of the Act leading to reassessment framed u/s 148/147 of the Act. The learned Counsel states that the original notice u/s 148 of the Act was issued on 28.06.2021 given a surviving period of 3 days in the light of TOLA vide Notification dated 28.06.2021 & 30.06.2021 in accordance with the decision of Hon’ble Supreme Court in the case of Ashish Agarwal. It is submitted that the deemed show-cause notice u/s 148A(b) was issued on 04.05.2022 to which the assessee filed its reply on 13.06.2022 and on 26.06.2022. The Assessing Officer passed an order under section 148A(d) of the Act and issued notice u/s 148 on 17.07.2022. In such circumstances, learned Counsel stated that the notice should have been issued by 29.06.2022 which was the last permissible date for notice u/s 148 (26.06.2022 + 3 surviving days). As the notice u/s 148 was issued on 17.07.2022, the entire proceeding is vitiated as time barred.
Per contra, learned DR relied on the orders of the authorities below.
We have heard the rival submissions and perused the material available on record. It is an uncontroverted fact that an original notice u/s 148 was issued on 28.06.2021 which was treated as show cause notice u/s 148A(b) in the light of the hon’ble Supreme Court decision in the case of Ashish Agarwal. It is also an admitted fact that the reply of the show-cause notice was given by the assessee on 27.06.2022 leaving a surviving period of only three days. The surviving period being three days, hence the last permissible date to issue notice u/s 148, as per the decision of the hon’ble Supreme Court in the case of Rajeev Bansal (23024) 469 ITR 46(S), was 29.06.2022 on which the order u/s 148A(d) of the Act as well as notice u/s 148 had to be issued. We find that the notice was issued on 17.07.2022 which is beyond the permissible date and hence, the same is considered as time barred. As the notice is time barred, entire proceedings is vitiated and hence, quashed. Appeal is allowed.
In the result, appeal filed by the Revenue is dismissed.
Order pronounced in the open court on 21.04.2026.