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Judgment
Per Raj Kumar Chauhan, Judicial Member:
The appeal of the assessee is directed against the order dated 25.03.2026 of Id. CIT(A)/NFAC, Delhi passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as "the Act") wherein the appeal against the best judgment Assessment Order u/s 147 r.w.s. 144 r.w.s. 144B of the Act dated 08.05.2023 was dismissed.
Facts in brief as culled out from the orders of the authorities below are that the assessee filed his return of income for A.Y. 2015-16 on 29.03.2016 declaring total income of Rs. 6,93,330/-. Subsequently, information was received that the assessee had claimed exempt income of Rs. 2.25 crores in the return for the year under consideration. Accordingly, the assessment was reopened u/s 147 of the Act and notice u/s 148 was issued on 22.07.2022. During the re-assessment proceedings, the assessee explained that the amount represented part of the sale consideration of Rs.3.20 crore arising from the sale of four pieces of agricultural land measuring 13.33 acres, sold to Shri Sanjeev Nahata vide sale deed dated 20.03.2013. It was submitted that the original cheques issued towards the sale consideration were not encashed due to a dispute and that, subsequently, Rs.2.50 crores was received through RTGS during A.Ys. 2014-15 and 2015-16. Out of this, Rs. 2.25 crores was claimed as exempt income in A.Y. 2015-16 on the basis of receipt. The Assessing Officer, however, held that the sale deed dated 20.03.2013 was an absolute transfer and that the assessee had failed to establish that the cheques mentioned in the sale deed were not encashed. The AO also noted that the assessee had not furnished the requisite bank statements and other documentary evidence. Accordingly, the AO treated the Rs.2.25 crores claimed as exempt income as unexplained money u/s 69A r.w.s. 115BBE and added the same to the total income of the assessee. The total income was consequently assessed at Rs.2,31,93,330/- u/s 144 r.w.s. 147/144B of the Act.
Aggrieved by the assessment order, the assessee filed appeal before the Id. CIT(A) who has dismissed the same and confirmed the addition made in the assessment order.
Aggrieved by the impugned order of the Id. CIT(A), the assessee is in appeal before the Tribunal and raising following grounds:
'1. That the impugned ex-parte order dated 25.03.2026 passed by the Ld. CIT(A) and the assessment order dated 8.05.2023 passed by the Learned Assessing Officer ("Ld. AO") under Section 147 read with Section 144 read with Section 144B of the Income-tax Act, 1961 ("the Act") is illegal, bad in law, without jurisdiction and in violation of the provisions of the Act and the principles of natural justice, and is therefore liable to be quashed.
2.That the impugned (re) assessment proceedings are void ab initio as the notice dated 22.07.2022 issued under Section 148 of the Income-tax Act, 1961 ("the Act") for Assessment Year 2015-16, is patently time-barred as held by the Hon'ble Supreme Court in Union of India v. Rajeev Bansal., Civil Appeal No.8629 of 2024 and the Hon'ble Delhi High Court in case of Makemytrip India Private Limited v. DCIT., W.P.(C) 2557 of 2023.
3.That the Ld. CIT(A) erred in proceeding on an entirely incorrect premise that the Ld. AO had made addition of Rs.2,25,00,000/- as undisclosed Long Term Capital Gain, whereas the Ld. AO had made addition under Section 69A treating the amount as unexplained money allegedly unconnected with sale of agricultural land and therefore the impugned appellate order, being founded on a complete misreading of the assessment order, is liable to be quashed. The addition is sustained on a completely different footing without issuing any notice or affording opportunity to the Appellant.
4.That the Ld. CIT(A) erred in confirming the addition merely for want of further evidence regarding agricultural status of land without examining the material already on record including sale deeds, confirmations and replies filed before the Ld. AO.
4.1That no adverse inference could have been drawn merely for non-filing of additional evidence when sufficient material was already available on record to examine the nature and source of the impugned receipts.
5.That the assessment framed under Section 144 read with Sections 147 and 144B of the Act is bad in law and void ab initio, inasmuch as the conditions prescribed under Section 144 were not satisfied, as the Appellant had already filed return under Section 139 and non-filing of return pursuant to notice under Section 148 does not attract Section 144(1)(a).
6.That on the facts and circumstances of the case and in law, the Ld. AO has erred in reopening on the basis of factually incorrect information.
7.That the reopening under Sections 147/148 is invalid as it is based on vague and incorrect information, without independent application of mind and without providing any information or material suggesting escapement of income.
7.1That the Ld. AO violated principles of natural justice by relying upon material gathered at the back of the Appellant without furnishing the same or affording opportunity to rebut/cross-examine contrary to held by the Hon'ble Supreme Court in the case of Kishanchand Chellaram v. CIT [(1980) 125 ITR 713 (SC)].
8.That the Ld. AO has failed to appreciate that the reopening of the assessment was initiated without any tangible material indicating specific information relating to the Appellant that could establish a direct or live nexus with the alleged escapement of income, rendering the reassessment bad in law.
9.That on the facts and in the circumstances of the case and in law, the reassessment proceedings initiated under Sections 147/148 of the Income-tax Act, 1961 are bad in law and liable to be quashed, as the Assessing Officer proceeded on the basis of alleged "reasons to believe", whereas under the substituted scheme of reassessment applicable from 01.04.2021, the jurisdictional requirement is existence of "information which suggests that income chargeable to tax has escaped assessment" and compliance with the mandatory procedure prescribed under Section 148A of the Act, which has not been validly satisfied in the present case.
10.Without prejudice, the reassessment proceedings are invalid since the alleged "reasons to believe" rely upon clause (b) of Explanation 2 to Section 147, which stood omitted/nonexistent under the substituted reassessment regime brought into effect from 01.04.2021 and, therefore, the very foundation assumed by the Assessing Officer for invoking jurisdiction under Section 147 is legally untenable and void ab initio.
11.That the reassessment proceedings are vitiated as the notice under Section 148A(b) with reasons attached, subsequent show cause notices and final assessment order proceeded on different and inconsistent reasons/additions, with no live nexus between initiation of proceedings and addition made thereby travelling beyond the scope of jurisdiction assumed.
12.That on the facts and circumstances of the case and in law, in the absence of providing a copy of valid sanction under section 151 of the Act, the notice issued under section 148 and the consequent assessment order are without authority of law and void ab initio vide Hon'ble Delhi High Court in Tia Enterprises (P.) Ltd. v. Income-tax Officer [2024] 158 taxmann.com 63 (SLP dismissed by the Hon'ble Supreme Court in Income-tax Officer v. Tia Enterprises (P.) Ltd. [2024] 167 taxmann.com 56).
12.1Without prejudice to the aforesaid, the approval of the competent authority is mechanical, without any application of mind and without perusing the records of the case.
13.That the Ld. CIT(A) erred in confirming the addition despite contradictory findings of the Ld. AO that the transaction pertained to AY 2013-14 while taxing the same in AY 2015-16 under Section 69A of the Act.
14.That the reopening is without jurisdiction as the Ld. AO wrongly invoked Section 149(1)(b) without satisfying the mandatory conditions prescribed therein. The assumption of jurisdiction is self-contradictory since the Ld. AO referred to immovable property/agricultural land for invoking extended limitation while simultaneously holding that the impugned amount was unrelated to the land transaction and taxable under Section 69A.
15.That on the facts and in the circumstances of the case and in law, the Ld. AO failed to conduct any enquiry as mandated under Section 148A(a) of the Act.
16.That on the facts and in the circumstances of the case and in law, the Ld. AO was not justified in making an addition of Rs. 2,25,00,000/- u/s 69A r.w.s. 115BBE of the Act in respect of claim of exemption in total disregard to explanation and documentary evidences placed on record.
17.That on the facts and in the circumstances of the case and in law, the Ld. AO and the Ld. CIT(A) failed to appreciate that once the source and nature of receipt stood duly explained as arising out of sale transaction of immovable property, the provisions of Section 69A were wholly inapplicable. 18. That on the facts and circumstances of the case and in law, the Ld. AO has made the impugned addition merely on the basis of suspicion, conjecture, surmises and preponderance of probabilities.
19.That the grounds of appeal are independent and without prejudice to each other."
We have heard the Id. AR and Id. DR and also examined the record. At the very outset, the Id. AR filed written submissions before us, pointing out that the notice issued u/s 148 of the Act was time-barred. 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 Id. 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 Id. DR, who was supplied with the written submissions regarding the issue of the notice issued u/s 148 of the Act being time-barred. The Id. 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. As per the written submissions filed by the Id. AR, the following facts emerge in respect of the notice issued u/s 148 of the Act being time-barred. A notice u/s 148 of the Act was issued on 28.06.2021 under the erstwhile provisions of the Act. Thereafter, a notice u/s 148A(b) of the Act was issued on 01.06.2022. Subsequently, an order u/s 148A(d) of the Act was passed on 22.07.2022, along with a notice u/s 148 of the Act. Thus, the notice dated 22.07.2022 issued u/s 148 of the Act for Assessment Year 2015-16 is clearly time-barred.
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 2015-16, the limitation for issuance of notice is under the amended provisions of section 148, as saved by the first proviso to section 149. 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 22.07.2022, 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 22.07.2022 for A.Y. 2015-16 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. 2015-16 expired on 31.03.2022. The notice u/s 148 having been issued on 22.07.2022, 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."
8.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 re-assessment 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 22.07.2022 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.