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Judgment
Per Raj Kumar Chauhan, Judicial Member:
The appeal of the assessee is directed against the order dated 09.01.2026 of Id. CIT(A)/NFAC, Delhi passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as "the Act") wherein the best judgment Assessment Order u/s 147 r.w.s. 144 of the Act dated 22.05.2023 was dismissed.
Facts in brief as culled out from the orders of the authorities below are that the assessee, an individual and proprietor of M/s Shree Ganpati Trading Co., Sirsa, did not file his return of income for A.Y. 2013-14. On the basis of information available with the Department regarding cash/credit deposits aggregating to Rs.9,12,26,825/- in the bank accounts of the assessee. During the course of assessment proceedings, various statutory notices were issued requiring the assessee to explain the nature and source of the deposits and furnish supporting evidence. However, the assessee failed to comply with the notices. On examination of the bank statements obtained from the concerned bank, the Assessing Officer observed that the assessee was carrying on business through his proprietary concern and had made frequent deposits and withdrawals. In the absence of any explanation or documentary evidence from the assessee, the Assessing Officer estimated income @ 8% of the total bank credits/turnover of Rs.9,12,26,825/- and accordingly made an addition of Rs.72,98,146/-. Consequently, the assessment was completed u/s 147 r.w.s. 144 of the Act.
Aggrieved by the impugned assessment order, the assessee filed appeal before the Ld. CIT(A) who has partly allowed the same and confirmed the addition made in the assessment order.
Aggrieved by the impugned order of the Ld. CIT(A), the assessee is in appeal before the Tribunal and raising following grounds:
'1. That the order passed by the Learned CIT(A) is contrary to law, facts and circumstances of the case and therefore liable to be set aside.
2.That the Learned CIT(A) erred in not adjudicating the legal ground raised by the appellant regarding invalidity and limitation of notice issued under Section 148, which goes to the root of jurisdiction.
3.That the Learned CIT(A) failed to appreciate that notice under section 148 dated 27-07-2022 is barred by limitation in view of the judgment of the Hon’ble Supreme Court in Union of India vs Rajeev Bansal.
4.That the Learned CIT(A) failed to consider the detailed written submission dated 17-12-2025 filed by the appellant demonstrating that the notice issued under section 148 dated 27-07-22 was beyond the permissible limitation period.
5.That the Learned CIT(A) erred in not adjudicating the legal issue relating to limitation despite specific grounds raised, thereby violating the settled principle that jurisdictional grounds must be decided first.
6.That the Learned CIT(A) erred in setting aside the assessment to the Assessing Officer without deciding the legality of the reassessment proceedings, which is contrary to settled judicial principles.
7.That the Learned CIT(A) failed to appreciate that if the notice issued under section 148 is time-barred, the entire reassessment proceedings become void ab initio and cannot be revived by remanding the matter to the Assessing Officer.
8.That the Learned CIT(A) wrongly invoked the proviso to section 251(1)(a) without first adjudicating the jurisdictional defects raised by the appellant.
9.That the Learned CIT(A) erred in confirming the validity of reassessment proceedings implicitly by remanding the matter without examining the jurisdictional issue.
10.That the Learned CIT(A) ought to have quashed the reassessment proceedings once the notice under section 148 was found to be barred by limitation.
11.That the Learned CIT(A) erred in confirming the validity of reassessment, as notice u/s 148 dated 27-07-22 has not been issued by FAO as per notification dated 29-03-22.”
We have heard the Ld. AR and Ld. DR and also examined the record. At the very outset, Ld. AR has referred page No. 3 of the paper book filed before us containing the table for calculation of time barred notice u/s 148 of the Act. It was argued that the case is covered by the judgment of Hon’ble Supreme court of India in Union of India & Ors. vs. Rajeev Bansal(2024) 469 ITR 46. (SC). It was therefore argued that since neither AO nor the Ld. CIT(A) has considered the said aspects regarding the notice u/s 148 of the Act was barred by limitation, therefore, the appeal be allowed and the assessment order be quashed.
We have also heard the ld. DR who was supplied with the paper book, and after going through Page No. 3 containing the table for the calculation of time-barred notice u/s 148 of the Act, the ld. DR has submitted that the Bench may consider the submissions with respect to the applicability of the judgment of Hon’ble Supreme Court in Rajeev Bansal case (supra) in its own discretion and has prayed for restoring the file to the AO for deciding the matter afresh.
We have considered the rival submissions and have perused the material on record. Page no. 3 of the paper book containing the details in respect of notice dated 28.07.2022 u/s 148 of the Act being time barred is extracted as under:
| S. No. | Particulars | Reference | |
|---|---|---|---|
| 1 | Assessment Year | 2013-14 | |
| 2 | Period of limitation u/s 149 [3 years or 6 years] | 6 years | |
| 3 | Original period of limitation u/s 149 | 31.03.2020 | |
| 4 | Extended period of limitation as per IT Act read with TOLA | 30.06.2021 | |
| 5 | Date of original notice u/s 148 under unamended Act | 21.06.2021 | Deemed notice u/s 148A(b) & order u/s 148A(d) |
| 6 | Time surviving from date of issuance of deemed SCN till expiry of period as extended by TOLA [from 30.06.2021] | 10 days | |
| 7 | Date of issue of notice u/s 148A(b) | 28.05.2022 | |
| 8 | Due date for filing of reply to notice issued u/s 148A(b) | 16.06.2022 | |
| 9 | Reply / objection filed on | Not filed | |
| 10 | Extended date by which notice should have been issued u/s 148 (16.06.2022 + 10 days) | 26.06.2022 | |
| 11 | Actual date of issuance of notice u/s 148 | 27.07.2022 | Time-barred by 31 days |
Before us, the learned counsel for the assessee pressed legal ground, challenging the jurisdiction of the Assessing Officer to initiate reassessment proceedings as the notice u/s 148 of the Act is barred by limitation. It was submitted that in view of the judgment of the Union of India & Ors. vs. Rajeev Bansal(2024) 469 ITR 46. (SC), the re-assessment proceedings initiated under the old or un-amended provisions of section 148, read with the extensions granted under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 ("TOLA"), are without authority of law.
It was contended that for Assessment Year 2013-14, the limitation for issuance of notice under the amended provisions of section 148, as saved by the third proviso to section 149, expired on 30.06.2021. Therefore, the Assessing Officer could not have resorted to the old provisions by invoking TOLA. Admittedly, in the present case, the notice u/s 148 pursuant to section 148A(d) was issued on 27.07.2022, well beyond the permissible limitation.
We have heard rival submissions of the parties including the challenge to the jurisdiction of the Assessing Officer to issue notices u/s 148 of the Act beyond the limitation period. The controversy lies in a narrow compass—whether the notice issued u/s 148 on 27.07.2022 for A.Y. 2013-14 is barred by limitation. The Hon'ble Supreme Court in Union of India vs. Rajeev Bansal (supra) has conclusively interpreted the interplay between the amended provisions of sections 148 and 149, the old regime, and TOLA. Significantly, the Revenue itself conceded before the Hon'ble Supreme Court that for A.Y. 2015-16, all notices issued on or after 01.04.2021 are liable to be dropped, as they would not fall for completion within the period prescribed under TOLA.
The Hon’ble Supreme Court further held that the extended ten-year limitation u/s 149(1)(b), as amended, operates prospectively, and for earlier assessment years, the test is whether the six-year period under the old regime was still alive on the date of issuance of notice. Applying the aforesaid test to the facts of the present case, it is undisputed that the six-year limitation for A.Y. 2013-14 expired on 30.06.2021. The notice under section 148 having been issued on 27.07.2022, the same is clearly barred by limitation.
We also note that identical issues have been examined and decided by Co-ordinate Bench of the Delhi Tribunal in the case of Sh. Deepak Agarwal vs. DCIT order dated 23.07.2025 passed in ITA No. 2307/Del/2025 wherein notices issued on 28.07.2022 for A.Y. 2015-16 was quashed as time-barred, following Rajeev Bansal (supra). For ready reference, findings of the Co-ordinate Bench of the Tribunal is reproduced as under:
> “2. The Ld. Counsel for the assessee, at the outset, submits that in the case of the assessee a notice u/s 148 was issued on 30.07.2022 under new law which is barred by limitation since the provisions of taxation and other laws (relaxation and amendment of certain provisions) (TOLA) are not applicable for the AY 2015-16 as held by the Hon’ble Jurisdictional High Court in the case of Make My Trip (India) Pvt. Ltd. in WP(c) 2558/2023 dated 24.03.2025.
3.Ld. Counsel further submits that recently the Hon'ble Supreme Court in the cases of Deepak Steels & Power Ltd. Vs. CBDT and Others in Civil Appeal No.5177/2025 dated 02.04.2025 noted that the Revenue made a concession before the Hon'ble Supreme Court while disposing off the appeal in the case of Union of India & Others Vs. Rajiv Bansal (2024) (SCC) Online SC 2693, that for the AY 2015-16 notices issued on or after 01.04.2021 will have to be dropped as they would not fall for completion during the period prescribed under the TOLA. Ld. Counsel also submitted that similar view has been taken by the Hon'ble Supreme Court in the case of ACIT Vs. Nehal Rashid Shah in SLP (Civil) Diary No. (S) 57209/2024 dated 4.4.2025. Therefore, it is submitted that in the light of these decisions the reassessment framed for the AY 2015-16 based on the notice issued u/s 148 of the Act dated 30.07.2022, is time barred and bad in law.
4.Ld. DR supported the orders of the Assessing Officer.
5.Heard rival contentions, perused the orders of the authorities below. Admittedly in this case notice u/s 148 was issued on 30.07.2022 under new law based on which the reassessment for the AY 2015-16 was framed by the AO on 31.5.2023. The reassessment was challenged before the Ld. CIT(Appeals) and the Ld. CIT(Appeals) dismissed the appeal for non-prosecution by the assessee.
6.In the case of Make My Trip (India) Pvt. Ltd. Vs. DCIT (supra) the Jurisdictional High Court considered whether reassessment completed for the AY 2015-16 based on a notice issued u/s 148 and the viz a viz the applicability of the provisions of TOLA and based on the concession of the Revenue that for the AY 2015-16 all the notices issued on or after 1.4.2021 will have to be dropped as they will not fall for completion during the period prescribed under the TOLA, held that the notice issued under 148 was beyond the period of limitation and consequently the same is liable to be set aside.
7.Further the Hon'ble Supreme Court in the case of Deepak Steel & Power Ltd. Vs. CBDT & Others (supra) quashed the notices issued u/s 148 observing as under: -
'2. These appeals arise from 'the order passed by the High Court of Orissa at Cuttack in Writ Petition (C) Nos. 2446 of 2823, 2543 of 2023 dated 1.2.2023 and 2544 of 2023 dated 10.02.2023 respectively by which the High Court disposed of the original writ petitions in the following terms:-
'1. The memo of appearance filed by Mr. S. S. Mohapatra, learned Senior Standing Counsel for Revenue Department on behalf of Opposite Parties is taken on record.
2.In view of the order passed by this Court on 1st December, 2022 in a batch of writ petitions of which W.P. (C) Mo.9191 of 2022 (Kailash Kedia v. Income Tax Officer) was a lead matter and the subsequent order dated 10th January, 2023 passed in W.P.(C) Mo.36314 of 2022 (Shiv Mettalicks Pvt. Ltd., Rourkela v. Principal Commissioner of Income Tax, Sambalpur), the Court declines to entertain the present writ petition, but leaves it open to the Petitioner to raise all grounds available to the Petitioner in accordance with law including the grounds urged in the present petition at the appropriate stage as explained by the Court in those orders.
3.The writ petition is disposed of in the above terms."
3.We heard Mr. Saswat Kumar Acharya, the learned counsel appearing for the appellants (assessee) and Mr. Chandrashekhar, the learned counsel appearing for the revenue.
4.The learned counsel appearing for the revenue with his usual fairness invited the attention of this Court to a three judge bench decision of this Court in Union of India and Ors. v. Rajeev Bansal, reported in 2024 SCC OnLine SC 2693, more particularly, paragraph 19(f) which reads thus:-
'19. (f) The Revenue concedes that for the assessment year 2015- 2016, all notices issued on or after April 1, 2021 will have to be dropped as they will not fall for completion during the period prescribed under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020."
5.As the revenue made a concession in the aforesaid decision that is for the assessment year 2015-2016, all notices issued on or after 1st April, 2021 will have to be dropped as they would not fall for completion during the period prescribed under the taxation and other laws (Relaxation and Amendment of certain Provisions Act, 2020). Nothing further is required to be adjudicated in this matter as the notices so far as the present litigation is concerned is dated 25.6.2021.
6.In view of the aforesaid, in such circumstances referred to above the original writ petition nos.2446 of 2023, 2543 of 2023 and 2544 of 2023 respectively filed before the High Court of Orissa at cuttack stands allowed.
7.The impugned notice therein stands quashed and set aside."
Above decisions squarely applies to the fact situation of the assessee and therefore respectfully following the above decisions, we hold that the notices issued u/s 148 on or after 1.4.2021 for reopening the assessment for the AY 2015-16 are barred by limitation and consequently the reassessment made based on such notices are bad in law and void ab initio. Thus, the impugned reassessment order having been made pursuant to notice issued u/s 148 dated 30.07.2022 the reassessment order is hereby held to be bad in law and the same is quashed. Ground Nos. B, C & D of grounds of appeal of the assessee are allowed."
Considering the above facts and circumstances and also applying the ratio laid down by the Hon'ble Supreme Court in the case of Rajeev Bansal (supra) and respectfully following the co-ordinate Bench decision in Sh. Deepak Agarwal (supra), we are of the opinion that the notice issued u/s 148 of the Act dated 27.07.2022 is barred by limitation as having been issued beyond the period specified u/s 149 of the Act. Consequently, the re-assessment proceedings initiated thereupon is hereby quashed.
In the result, the appeal of the assessee is allowed.