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Judgment
PER RENU JAUHRI :
The above captioned appeal is preferred by the assessee against the order dated 07.08.2025, passed by Ld. CIT(A)/NFAC, Delhi u/s 250 of the Income Tax Act, 1961 [hereinafter referred to as, “Act”] for A.Y. 2014-15 in Appeal No. NFAC/2013-14/10258187. The Assessment was framed by the Assessing Officer [for short, “AO”] u/s 147 r.w.s 144B of the Act, vide order dated 27.05.2023.
The assessee has raised following grounds of appeal:
“a. On the facts and circumstances of the case and in law, the ld. CIT(A) erred in upholding the initiation of reassessment proceedings by wrongly relying upon the decision of Hon'ble Apex court in the case of Rajeev Bansal v UOI whereas as per this decision of apex court itself, the reassessment proceedings initiated was liable to be quashed.
b. On the facts and circumstances of the case and in law, the notice u/s 148 issued in this case is bad-in-law, without jurisdiction and barred by limitation and, therefore, the said notice u/s 148 along with assessment order passed on the foundation of such notice are liable to be quashed and CIT(A) erred in not holding so.
c. On the facts and circumstances of the case and in law, the reassessment proceedings initiated is bad-in-law, without jurisdiction and contrary to the provisions of law including the specific provisions of section 147 to section 151A of Income Tax Act, 1961 and therefore, the reassessment proceeding initiated along with assessment order passed are liable to be quashed and CIT(A) erred in not holding so.
d. On the facts and circumstances of the case and in law, the assessment order passed by the assessing officer is bad-in-law, without jurisdiction and barred by limitation and CIT(A) erred in not holding so.
e. On the facts and circumstances of the case and in law, the ld. CIT(A) erred in treating the appeal as withdrawn in view of the VSV scheme, even though the assessee company had not opted for scheme in respect of the year under consideration i.e., A.Y. 2014-15.
f. On the facts and circumstances of the case and in law, the ld. CIT(A) erred not deleting the addition made by the assessing officer of Rs. 2,46,45,324/- on the account of cessation of liability.
g. On the facts and circumstances of the case and in law, the ld. CIT(A) erred not considering the detailed submission and paper book filed by the appellant.”
Brief facts are that the assessee company field its return for A.Y. 2014-15 on 26.11.2014 declaring total income of Rs. 26,11,290/-. Subsequently, on the basis of information available on the Insight portal regarding bogus transactions made by the assessee, the case was reopened and a notice u/s 148 was issued. Assessment was completed u/s 147 r.w.s 144B on 27.05.2023, assessing total income at Rs. 2,72,57,014/-. Aggrieved, the assessee preferred an appeal before Ld. CIT(A) whereby the Ld. CIT(A) treated the appeal as withdrawn in view of the fact that the assessee had applied for Vivad Se Vishwas Scheme (VSVS) and Form No. 4 had been issued on 16.05.2025. Aggrieved with the order of Ld. CIT(A), the assessee had filed appeal before the Tribunal.
At the outset, Ld. AR has submitted that Ld. CIT(A) wrongly dismissed the assessee’s appeal as the assessee had not opted for VSVS for the year under consideration. He further submitted that the case was covered by the decision of the Hon’ble Apex Court in the case of UOI & Ors. Vs Rajeev Bansal [2024] 469 ITR 46 (SC) and the notice u/s 148 was invalid and liable to be quashed.
In this regard, following chart of relevant dates has been filed:
| S. No. | Particulars | Date |
|---|---|---|
| A | Date of original notice issued u/s 148 | 29.06.2021 |
| B | Time remaining till 30.06.2021 | 1 Day |
| C | Date of notice issued u/s 148A(b) | 26.05.2022 |
| D | Due date for filing of reply to notice issued u/s 148A(b) | 09.06.2022 |
| E | Reply/objection filed on | 09.06.2022 |
| F | Extended date by which notice should have been issued u/s 148(E+B) | 10.06.2022 |
| G | Actual date of notice issued u/s 148 | 30.07.2022 |
| H | Is notice issued is valid? | No |
Ld. DR on the other hand, has relied on the orders of the lower authorities.
We have heard the rival submissions and carefully considered the material placed on record. We note that the notice u/s 148 has not been issued within the surviving period available to the Ld. AO. In the case of Rajeev Bansal (supra), the Hon’ble Apex Court has decided the matter as under:
“ 110. The effect of the creation of the legal fiction in Ashish Agarwal (supra) was that it stopped the clock of limitation with effect from the date of issuance of Section 148 notices under the old regime [which is also the date of issuance of the deemed notices]. As discussed in the preceding segments of this judgment, the period from the date of the issuance of the deemed notices till the supply of relevant information and material by the assessing officers to the assesses in terms of the directions issued by this Court in Ashish Agarwal (supra) has to be excluded from the computation of the period of limitation. Moreover, the period of two weeks granted to the assesses to reply to the show cause notices must also be excluded in terms of the third proviso to Section 149.
111.The clock started ticking for the Revenue only after it received the response of the assesses to the show causes notices. After the receipt of the reply, the assessing officer had to perform the following responsibilities: (i) consider the reply of the assessee under Section 149A(c); (ii) take a decision under Section 149A(d) based on the available material and the reply of the assessee; and (iii) issue a notice under Section 148 if it was a fit case for reassessment. Once the clock started ticking, the assessing officer was required to complete these procedures within the surviving time limit. The surviving time limit, as prescribed under the Income Tax Act read with TOLA, was available to the assessing officers to issue the reassessment notices under Section 148 of the new regime.
112.Let us take the instance of a notice issued on 1 May 2021 under the old regime for a relevant assessment year. Because of the legal fiction, the deemed show cause notices will also come into effect from 1 May 2021. After accounting for all the exclusions, the assessing officer will have sixty-one days [days between 1 May 2021 and 30 June 2021] to issue a notice under Section 148 of the new regime. This time starts ticking for the assessing officer after receiving the response of the assessee. In this instance, if the assessee submits the response on 18 June 2022, the assessing officer will have sixty-one days from 18 June 2022 to issue a reassessment notice under Section 148 of the new regime. Thus, in this illustration, the time limit for issuance of a notice under Section 148 of the new regime will end on 18 August 2022. ”
Respectfully following the decision of the Hon’ble Apex Court, we hold that the notice u/s 148 in the instant case was issued beyond the prescribed time limit as is evident from the chart reproduced hereinbefore. Hence the notice u/s 148 and consequent assessment order are, hereby, quashed.
In the result, the appeal of the assessee is allowed.