Rajiv Garg vs Commissioner Of Income Tax (Appeals)

PER VIKAS AWASTHY, JM:

This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short ‘the CIT(A)’] dated 18.09.2025, for Assessment Year 2014-15.

The assessee in appeal has primarily assailed validity of reassessment proceedings and the assessment order passed u/s.147 r.w.s 144B of the Income Tax Act, 1961(hereinafter referred to as ‘the Act’).

Shri Deepam Jain, appearing on behalf of the assessee submits that the assessee filed his return of income for A.Y. 2014-15 declaring income of Rs.9,76,450/-. Reassessment proceedings were initiated against the assessee, and notice u/s. 148 of the Act was issued on 07.04.2021. The reassessment proceedings were completed on 29.08.2022, making addition of Rs.2,49,729/- by estimating gross profit @ 11.79% on the alleged difference in total purchases of Rs.21,18,143/-as reported in Profit and Loss account and Ledger. The alleged difference in purchases was purely based on surmises and conjectures of the Assessing Officer (AO). The ld. Counsel for the assessee submits that the provisions of section 148 of the Act were amended by the Finance Act, 2021. Consequent to amendment, the notice issued u/s.148 of the Act under the old regime after 01.04.2021 was invalid. Nevertheless, the Hon’ble Supreme Court of India, in the case of UOI vs. Ashish Aggarwal, 138 taxmann.com 64, granted one-time immunity to the Department and validated notices issued under section 148 of the Act between 01.04.2021 and 30.06.2021. Consequent, to the judgment rendered in the case of Ashish Aggarwal (supra), the Central Board of Direct Taxes issued Instruction No. 1/2022 dated 11.05.2022. The ld. Counsel asserted that, as per the said instructions, notices could not have been issued for A.Y. 2013-14 to 2015-16 if the income escaping assessment is likely to amount to less than Rs.50,00,000/-. In the case of the assessee, the addition has been made only to the tune of Rs.2,49,729/-, and that too on estimation. The ld. Counsel thus prayed for quashing the assessment.

Shri Manoj Kumar, representing the department fairly stated that the addition in the case of assessee for AY 2014-15 in reassessment proceedings is less than Rs.50,00,000/-.

Both sides heard, orders of the authorities below examined. Undisputedly, in reassessment proceedings for A.Y. 2014-15 in the case of the assessee, the addition is only to the extent of Rs. 2,49,729/-. As per the provisions of section 149(1) of the Act, as amended by the Finance Act, 2021 w.e.f. 01.04.2021, no notice under section 148 of the Act shall be issued for the relevant assessment year if three years, but not more than ten years, have elapsed from the end of the relevant assessment year, unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to Rs.50,00,000/- or more for that year. Thus, in light of the aforesaid provisions of section 149(1) of the Act, the reassessment proceedings initiated against the assessee are without jurisdiction and hence, are quashed.

In the result, appeal of the assessee is allowed.