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Judgment
Per Raj Kumar Chauhan, Judicial Member:
The appeal of the assessee is directed against the order dated 12.11.2025 of Id. Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi (hereinafter referred to as the "CIT(A)/NFAC") passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as "the Act") wherein the best judgment Assessment Order u/s 144B of the Act dated 24.05.2023 was dismissed.
The facts in brief as culled out from para 3 of the impugned order are as under:
"The appellant, M/s Singhal Trading Co., is a registered partnership firm engaged in trading activities, located at C-107, Ashok Vihar, Phase-I, Delhi. The firm filed its return of income for A.Y. 2013-14 on 31.03.2014 under section 139(4), declaring a total income of Rs. 60,590. Subsequently, the case was reopened based on information received from the ITO (Intelligence & Criminal Investigation)-6, New Delhi, indicating that one of the partners, Shri Ratan Lal, had sold a property at B-60, Group Industrial Area, Wazirpur, Delhi, for Rs. 3,35,00,000 as per Sub-Registrar records. After issuing notice under section 148A(b) dated 28.05.2022 and considering the reply dated 11.06.2022, the AO passed order under section 148A(d) on 28.07.2022 holding that income had escaped assessment. Reassessment was completed under section 147 r.w.s. 143(3) on 24.05.2023, determining total income at Rs. 2,41,19,030. The AO observed that the property sale consideration disclosed was less than the stamp duty valuation and accordingly made an addition under section 50C treating the difference as unaccounted income."
Aggrieved by the impugned assessment order, the assessee filed appeal before the Ld. 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.The Ld. AO erred in law and in the facts of the case in issuing notice u/s 148 on 28.07.2022 which is beyond period of limitation and hence the consequent assessment framed is bad in law which need to be quashed and the Ld. CIT(A) erred in law in not quashing the assessment order.
2.The Ld. AO erred in law and on facts in initiating the proceedings u/s 148 of the Income Tax Act without complying with pre-conditions required to be fulfilled therefor in the facts and circumstances of the case and the Ld. CIT(A) erred in law and on facts in confirming the action of the Ld. AO. The approval granted by Hon'ble Pr. CCIT is mechanically accorded.
3.The Ld. AO erred in law and on facts in making the addition of Rs. 2,40,58,439/- under the head "Capital Gains" and the Ld. CIT(A) erred in sustaining the addition in the facts and circumstances of the case. The Ld. AO erred in invoking provisions of section 50C of the Act and the Ld. CIT(A) erred in confirming the action of the Ld. AO.
4.The Ld. AO erred in law and on facts in framing a casual & provisional assessment subject to modification later on receipt of evidence in the form of valuation report of DVO & the Ld. CIT(A) erred in confirming the action of the Ld. AO. The assessment so framed is invalid in the eyes of law, the same being not permissible in law.
5.The Ld. AO erred in law and on facts in issuing notice of demand of Rs. 1,10,02,530/- u/s 156 of the Act requiring the assessee to pay the same within 30 days, in the wake of observations made in Para 3.2 & 3.4 of the assessment order holding that the final tax implication of the assessment order will be enforceable after receipt of DVO report and the Ld. CIT(A) erred in not quashing the demand raised vide notice of demand u/s 156.
6.The Ld. AO erred in law and on facts in charging interest Rs. 60,47,808/- u/s 234B of the Income Tax Act in the facts and circumstances of the case & the Ld. CIT(A) erred in confirming the action of the Ld. AO."
We have heard the Ld. AR and Ld. DR and also examined the record. At the very outset, Ld. AR has referred page No. 1 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. 1 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. 1 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:
| Particulars | Computation | Dates/Days | |
|---|---|---|---|
| 1 | Date of issue of Original Notice u/s 148 within TOLA Period | A | 23.06.2021 |
| 2 | Last date of TOLA | B | 30.06.2021 |
| 3 | Balance (On Inclusive method) | C = B - A | 8 |
| 4 | Minimum days available as per 4th Proviso of Section 149(1) | D | 7 |
| 5 | Then SURVIVING PERIOD (Para-108 to 113 of Rajeev Bansal) | E (Higher of C & D) | 8 |
| 6 | Date of response filed by Appellant to 148A(b) notice | F | 11.06.2022 |
| 7 | Date on which Period of two weeks allowed to assessee to respond to notice ends (deemed stay as per 3rd proviso to section 149 and Para 114 (g) of Rajeev Bansal) | G | 13.06.2022 |
| 8 | Last date for issuing notice u/s 148 [i.e., 11.06.2022+ 8 days] | H = E + F | 19.06.2022 |
| 9 | Actual date of issuance of notice u/s 148 | I | 28.07.2022 |
| 10 | Then Notice is time barred by (Para 114 (h) of Rajeev Bansal) | J = I-H | 39 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 13.06.2022. 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 28.07.2022, 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 28.07.2022 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 28.07.2022, 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 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 28.07.2022 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.