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Judgment
PER SANJAY AWASTHI, ACCOUNTANT MEMBER:
The present appeal arises from order dated 27.11.2025, passed u/s 250 of the Income Tax Act, 1961 (hereafter as “the Act”), by Ld. CIT(A)-NFAC, Delhi. In this matter, the case was reopened on the basis of information received from the Investigation Wing. The said information indicated that the assessee was involved in allegedly generating bogus short term gain through trading in penny stocks. The Ld. AO added an amount of Rs.13,41,020/- u/s 69A of the Act by treating the capital gains as bogus.
The assessee could not succeed before the Ld. CIT(A) and has approached the ITAT with several grounds of appeal. Thereafter, the assessee filed an additional ground of appeal as under: -
“That the reassessment proceedings u/s 147 of the Act are illegal and bad in law, as the same has been completed without issuing the mandatory notice u/s 143(2) of the Act, and therefore, the entire proceedings are liable to be quashed.”
Before us the Ld. AR requested that the additional ground may be adjudicated before proceeding any further on the grounds pertaining to the merit. The Ld. AR filed a chart of dates, through which it was explained that following the Hon’ble Apex Court’s judgment in the case of Rajeev Bansal reported in 167 taxmann.com 70 (SC), a notice u/s 148 could have been issued by 14.06.2022, whereas it was actually issued on 30.06.2022. The Ld. AR relied on the table of events prepared by him and took us through the relevant dates. For the sake of reference the chart of dates deserves to be extracted as under: -
B. COMPUTATION OF LIMITATION AS PER DECISION OF UOI VS. RAJEEV BANSAL:
| S.No. | SC judgement Paras | ||
| 1. | Period of limitation u/s 149 [3 years or 6 years] | 3 years | |
| 2. | Original Period of Limitation u/s 149 | 31.03.2021 | |
| 3. | Extended period of limitation as per IT Act read with TOLA | 30.06.2021 | Paras 65-69 |
| 4. | Date of original notice u/s 148 – deemed SCN u/s 148A (b) | 24.06.2021 | |
| 5. | Time surviving from the date of issuance of deemed SCN till the expiry of the period as extended by TOLA [from 24.06.2021 till 30.06.2021] = ‘6 days’ Surviving time period of 7 days available vide virtue of applicability of the fourth proviso to section 149 of the Act. | 7 Days | Paras 109-113 |
| 6. | Period of deemed stay to be excluded as per 3rd proviso to section 149 [Date of Original 148 till date allowed to file a reply to assessee] | 24.06.2021 to 07.06.2022 | Paras 105-107 |
| 7. | Last date for issuing notice u/s 148 [i.e., 07.06.2022 + 7 days] | 14.06.2022 | Para 77 |
| 8. | Actual date of issuance of notice u/s 148 | 30.06.2022 | |
| 9. | Whether notice u/s 148 issued under the new regime is within time period | No, barred by time limitation | Para 77 |
The Ld. DR relied on the orders of the authorities below.
We have carefully considered the submissions of Ld. AR/DR and have gone through the documents before us. We have also perused the order of the Hon’ble Supreme Court in the case of Rajeev Bansal (supra). It is seen from the chart prepared by the Ld. AR that by all means a notice u/s 148 could have been issued for the year under consideration (AY 2017-18) by 14.06.2022 only. Since the notice has been issued on 30.06.2022 hence, the same has to be treated as barred by limitation. Accordingly, since the assumption of jurisdiction itself is illegal in the eyes of law, hence, the consequential order by the Ld. AO cannot have any legal validity. The same is accordingly treated as void.
Since the assessee has succeeded on the additional ground, hence, none of the other grounds are being adjudicated and they are hereby left open.
In the result, this appeal is allowed.