AI Structured Summary
Not yet generated for this judgment
Judgment
PER MANISH AGARWAL, AM:
This appeal is filed by the Assessee against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A) in short], dated 28.02.2026 in Appeal No. NFAC/2014-15/10287687 arising out of the assessment order passed u/s 147 read with section 144B of the Income Tax Act, 1961 (the Act, in short) dated 10.05.2023 for Assessment Year 2015-16.
The brief facts of the case are that case of the assessee was reopened u/s 148 of the Income Tax Act (“the Act” for short) and the assessment was completed vide order passed u/s 147 r.w.s 144B of the Act dated 24/05/2023 at total income of Rs. 79,85,410/- as against declared income of Rs. 9,93,460/-.
Against such order, the assessee preferred an appeal before Ld. CIT(A), who dismissed the appeal of the assessee. Thus, the present appeal is preferred before us by taking various grounds of appeal as per the appeal memo.
In Ground of appeal No. 1, the assessee has challenged the reopening on the ground that the notice issued u/s 148 is barred by limitation.
Before us, Ld. AR of the assessee submitted that the impugned year is Asst. Year 2015-16, for which notice u/s 148 of the Act was originally issued on 09/06/2021 and, thereafter, following the judgment of Hon’ble Supreme Court in the case of Union of India vs. Ashish Agarwal reported in 444 ITR 1 (SC), (supra), a fresh notice u/s 148 of the Act was issued on 23/07/2022. Ld. AR submits that before the hon’ble Apex Court during the course of hearing in the case of Union of India & Ors. vs. Rajiv Bansal reported in (2024) 469 ITR 46, the Learned Additional Solicitor General of India, Mr. N. Venkataraman has made a statement that the Revenue will drop all the notices issued on or after 1st April, 2021 related to Assessment Year 2015-16. It is submitted by Ld. AR that since in the instant case, notice u/s 148 of the Act for Asst. Year 2015-16 was issued after 1st April, 2021, therefore, in terms of the statement of Additional Solicitor General of India, reassessment proceedings for AY 2015-16 deserves to be dropped and consequently re-assessment order be quashed.
On the other hand, Ld. Sr. DR for the Revenue vehemently supported the orders of the lower authorities and submitted that the matter be decided in terms of the judgment of Hon’ble Supreme Court in the case of Rajiv Bansal (supra).
We have heard the rival submissions and perused the materials available on record. It is an admitted fact that on first occasion, notice u/s 148 in the case of assessee was issued on 09/06/2021 which was dropped and fresh reassessment proceedings u/s 147 of the Act were initiated in terms of directions given by Hon’ble Supreme Court in the case of Union of India vs. Ashish Agarwal (supra) and after following the amended provisions of section 148A and fresh notice u/s 148 of the Act was issued on 23/07/2022. The Ld. Additional Solicitor General of India in the case of Rajiv Bansal (supra) has made categorical statement before the Hon’ble Supreme Court that all the notices issued for Asst. Year 2015-16 on or after 1st April 2021 will be dropped. However, in the instant case, re-assessment order was passed based on the reassessment proceedings initiated vide notice issued u/s 148 of the Act on 23/07/2022. The relevant extract of the assertion made by the Ld. Additional Solicitor General of India before the Hon’ble Supreme Court as reproduced in para 19(f) of the order of Rajeev Bansal (supra) 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 limits specified under the Income Tax Act;
b. Section 149 of the new regime provides three crucial be nefits to the assesses: (i) 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 (iii) 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)(b) 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 (1) Within 3 Years (2) Expiry of Limitation read with TOLA for (2) (3) Within six Years (4) Expiry of Limitation read with TOLA for (4) (5) 2013-2014 31.03.2017 TOLA not applicable 31.03.2020 30.06.2021 2014-2015 31.03.2018 TOLA not applicable 31.03.2021 30.06.2021 2015-2016 31.03.2019 TOLA not applicable 31.03.2022 TOLA not applicable f. The Revenue concedes that for the assessment year 2015-16, all notices issued on or after 1 April 2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA;
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(b). 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).
Looking to the facts and considering the assessment year involved is 2015-16, in view of the admission made by the Revenue before the Hon’ble Supreme Court in the case of Rajeev Bansal (supra) for Assessment Year 2015-16, the notice issued u/s 148 of the Act dated 23/07/2022 is bad in law and consequent reassessment order passed u/s 147 r.w.s. 144B of the Act is hereby, quashed. Accordingly, legal ground of appeal No.1 taken by the assessee is allowed.
Since, the legal ground taken by the assessee is allowed, other grounds of appeal became academic.
In the result appeal of the assessee is allowed.