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Judgment
PER NAVEEN CHANDRA, ACCOUNTANT MEMBER :
The captioned appeal preferred by the assessee is against the order of the CIT(A)-NFAC, Delhi passed under section 250 of the Income-tax Act, 1961 (in short “the Act”) order dated 22.10.2025 arising out of Assessment order dated 26.05.2023 passed under section 143(3) of the Act by the Assessment Unit, Income-tax Department – DEL-W-(49)(5)for the Assessment Year 2017-18.
The grounds raised by the assessee are as under :
1.“On facts and circumstances of the case, the reassessment proceedings-initiated u/s 147 of IT Act by issue of notice dated 28.07.2022 u/s 148 of IT Act is barred by limitation and therefore, the reassessment proceedings and consequent reassessment order are void-ab-initio.
2.The authorities below have erred both on facts and in law in continuing the reassessment proceedings under the new regime without obtaining sanction w/s 151(ii) of the Act and the sanction u/s 151(i) obtained in the present case is not valid in law.
3.The impugned reassessment proceedings completed vide order dated 26.05.2023 u/s 147 of IT Act is barred by limitation u/s 153 of IT Act therefore such assessment is void ab initio and liable to be quashed.
4.The impugned assessment is invalid and without jurisdiction as the said assessment has been initiated and completed without complying with legal requirements of the provisions of section 147/148/148A/151/149 of the Income Tax Act therefore such assessment is void ab initio and liable to be quashed.
5.On facts and circumstances of the case, the authorities below has erred in making addition of Rs.42,65,140/- w/s 68 rws 115BBE of IT Act ignoring the fact that the above provision has no application when the requirement of said section is not complied with.
6.On facts and circumstances of the case, the authorities below has erred in making addition of Rs.42,65,140/- u/s 68 rws 115BBE of IT Act treating the sale consideration from shares of unlisted company as unexplained cash credit ignoring the fact that the appellant has duly discharged its onus w/s 68 of IT Act.
7.On facts and circumstances of the case, the authorities below has erred in making addition of Rs. 1,27,954/- u/s 69C rws 11SBBE of IT Act treating the alleged commission paid on arranging accommodation entry as unexplained expenditure without bringing any corroborating material on record.
8.Without prejudice to above grounds, the authorities below have erred both in facts and in law in invoking provisions of sec 11SBBE of IT Act on the additions made ws 69C and ws 68 of IT Act without appreciating the fact that the above provision has Rs. 0 prospective application w.e.f 01.04.2017 only and therefore, the above provision is not applicable to transaction on the prior dates.
9.The appellant craves leave to add, DLEETE, modify / amend 9 the above grounds of appeal with the permission of the Hon’ble appellate authority.”
Brief facts of the case are that the assessee being HUF had filed its return of income of Rs. 8,28,280/- on 29.03.2018 as per provision of section 139 of the Act for A.Y. 2017-18. The AO received information from Directorate of Investigation through Insight portal regarding sale and purchase of shares in cash by fabricating the contract note and that the assessee is one of the beneficiaries of bogus LTCG in the penny scrip of M/s M/s Asian bulls Capital Private Limited wherein it was alleged that sale purchase in M/s Asian Bulls Capital Pvt Ltd was done in cash and booked bogus Long Term Capital Gains (LTCG) while claiming tax exemption of Rs. 42,65,140 under section 10(38) of the Income-tax Act, 1961. In this process besides getting Rs.4,65,140/-, he paid some commission to the entry operators. As per the confession made by the director of M/s Asian Bulls Capital Pvt. Ltd, he was taking 3% as commission on the accommodation entry. Accordingly, on the said rate of commission for getting benefit of Rs.42,65,140/- assessee paid commission of Rs.1,27,954/ to the operator whose source remain unexplained and the same is added to the total income.
Assessee filed appeal before the learned CIT(A) who dismissed the appeal. Aggrieved, assessee now in appeal before us.
At the outset, learned Counsel of the assessee stated that Notice u/s 148 of the Act was issued under the un-amended Act to the assessee on 29.06.2021. In view of the decision of Hon'ble Supreme Court in the case of Union of India Vs. Ashish Agarwal reported in 444 ITR 1 (SC) dated 04.05.2022, the Id AO issued letter u/s 148A(b) of the Act on 24.05.2022. The assessee filed its reply on 07.06.2022. The Id AO passed an order u/s 148A(d) of the Act on 28.07.2022 and issued notice u/s 148 of the Act on 28.07.2022. The ld AR submits that the notice u/s 148 dated 28.07.2022 is time barred in the light of decision of Hon'ble Supreme Court in the case of Union of India Vs. Rajeev Bansal reported in 469 ITR 46 (SC).
Per contra, learned DR relied upon the order of the AO.
We have heard the rival submissions and perused the material available on record. It is an admitted fact that the assessee was initially issued notice u/s 148 dated 29.06.2021 which in terms of TOLA and CBDT instruction, gives the surviving period of one day in terms of the decision of hon’ble Supreme Court in case of Rajeev Bansal. The assessee was issued a show cause notice u/s 148A(b) in light of Ashish Agarwal case of Hon’ble Supreme Court on 24.05.2022 which was replied to by the assessee on 07.06.2022. This leaves the surviving period of only one day, till 08.06.2022, for issuance of notice u/s 148 of the Act. We find that the AO passed an order u/s 148A(d) on 28.07.2022 and issued the notice u/s 148 on 28.07.2022. Thus, the AO has exceeded the surviving period for issuance of notice u/s 148 in accordance with the decision of Supreme Court in case of Rajeev Bansal. Accordingly, the notice u/s 148 of the Act is quashed being barred by limitation. Accordingly, the resultant reassessment order u/s 147 is also rendered unsustainable in the eyes of law.
In the result, appeal of the assessee ITA No. 4598/Del/2024 is allowed.