A B MOTORS PVT. LTD. ,PATIALA V. THE PR. COMMISSIONER OF INCOME TAX, PATIALA, PATIALA

ITA 175/CHANDI/2024

AI Insights

The case involves A.B. Motors Pvt. Ltd., which appealed against the orders of the Commissioner of Income Tax (Appeals) and the Commissioner of Income Tax, Patiala. The appeals were related to the re-opening of the assessment for the year 2015-16 and the subsequent order under section 263 of the Income Tax Act, 1961. The primary contention was the issuance of a notice under section 148 for re-opening the assessment, which the assessee argued was time-barred. The Tribunal examined the legal provisions and precedents, particularly the Supreme Court's ruling in Union of India Vs Rajiv Bansal, and found in favor of the assessee, leading to the quashing of both the re-opening of the assessment and the section 263 order.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 829891 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Chandigarh
• Assessment Year: misc
• Appeal Filed On: 23-02-2024
• Other Referred Cases: Union of India Vs Rajiv Bansal, Shri Puneet Saggar Vs ITO
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANAV BANSAL; VIVEK VARDHAN
• Assessee Lawyers: TEJMOHAN SINGH
• Keywords: Reopening of assessment; Revision of order
• Section: 147; 148; 263

Judgement Text

"आयकर अपीलȣय अͬधकरण,चÖडीगढ़ Ûयायपीठ, चÖडीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, ‘A’ CHANDIGARH BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No. 989/CHD/2024 Ǔनधा[रण वष[ / Assessment Year : 2015-16 A.B. Motors Pvt. Ltd., C/o Shri Tej Mohan Singh, Advocate # 527, Sector 10-D, Chandigarh. Vs The DCIT, Circle, Patiala. èथायी लेखा सं./PAN NO: AABCA5528M अपीलाथȸ/Appellant Ĥ×यथȸ/Respondent आयकर अपील सं./ ITA No. 175/CHD/2024 Ǔनधा[रण वष[ / Assessment Year : 2015-16 A.B. Motors Pvt. Ltd., C/o Shri Tej Mohan Singh, Advocate # 527, Sector 10-D, Chandigarh. Vs The PCIT, Patiala. èथायी लेखा सं./PAN NO: AABCA5528M अपीलाथȸ/Appellant Ĥ×यथȸ/Respondent Assessee by : Shri Tej Mohan Singh, Advocate Revenue by : Shri Manav Bansal, CIT DR & Shri Vivek Vardhan, Addl. CIT, Sr.DR Date of Hearing : 15.10.2025 Date of Pronouncement : 12.01.2026 PHYSICAL HEARING O R D E R PER RAJPAL YADAV, VP The assessee is in appeal against the orders of ld. Commissioner of Income Tax (Appeals) [in short ‘the CIT (A)’] Printed from counselvise.com ITA Nos. 989 & 175/CHD/2024 A.Y. 2015-16 2 dated 20.08.2024 passed u/s 250 of the Income Tax Act, 1961 and the order of ld. Commissioner of Income Tax ( in short ‘the CIT’) dated 25.01.2024 passed u/s 263 of the Income Tax Act in assessment year 2015-16. 2. First we take quantum appeal i.e. ITA 989/CHD/2024. The assessee has taken 11 grounds of appeal, however, in ground Nos. 1 to 4, it has challenged re-opening of assessment u/s 147 by issuance of a notice u/s 148 of the Income Tax Act. 3. The brief facts of the case are that assessee has filed its return of income electronically on 29.10.2015 declaring total income of Rs.2,04,25,870/-. This return was processed u/s 143(1) by the CPC. The AO, thereafter, received an information from Director General of GST Intelligence, Ludhiana through REIC that assessee had received discount/incentive of Rs.2.64 Cr but had not paid Service Tax on the same. The AO has recorded reasons and reopened the assessment by issuance of a notice u/s 148 on 12.04.2021. The ld. counsel for the assessee submitted that this notice is time barred and not protected by TOLA because assessment Printed from counselvise.com ITA Nos. 989 & 175/CHD/2024 A.Y. 2015-16 3 year involved herein is assessment year 2015-16, hence, according to him, issue is clearly covered by the decision of Hon'ble Supreme Court in the case of Union of India Vs Rajiv Bansal reported in 167 taxmann.com 70. He placed on record copy of Tribunal’s order in which both of us have decided the appeal of the assessee (ITA No.505/CHD/2024 Shri Puneet Saggar Vs ITO). 4. The ld. DR was unable to controvert the submissions of the ld. counsel for the assessee. 5. We have duly considered the rival contentions and gone through the record carefully. The issue before us is whether AO was empowered to issue notice u/s 148 after 01.04.2021 in assessment year 2015-16. In other words, whether assessment for assessment year 2015-16 could be reopened with the help of TOLA after 01.04.2021. The Hon'ble Supreme in paragraph 19 at clause (f) has observed that “Revenue has conceded that for assessment year 2015-16, all notices issued on or after 01.04.2021 will have to be dropped as they will not form for completion during the period prescribed under TOLA”. Printed from counselvise.com ITA Nos. 989 & 175/CHD/2024 A.Y. 2015-16 4 6. In view of the above, the re-opening in the present case is bad and not in accordance with law. Accordingly, these grounds of appeal are allowed and re-opening of the assessment is quashed. 7. In the result, appeal of the assessee in ITA No.989/CHD/2024 is allowed. 8. Now we take ITA No.175/CHD/2024. The present appeal is directed against the order of ld. Commissioner of Income Tax passed u/s 263 of the Income Tax Act. 9. With the assistance of the ld. Representative, we have gone through the record and perused Section 263 of the Act. The opening line of this Section would contemplate, “The Pr. Chief Commissioner or Chief Commissioner or Pr. Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the AO or the TPO, as the case may be, is erroneous in so far as it is prejudicial to the interests of Revenue………”. A perusal of the opening line would indicate that the powers under Section 263 could be exercised if any order, being passed by an Assessing Officer during any Printed from counselvise.com ITA Nos. 989 & 175/CHD/2024 A.Y. 2015-16 5 proceeding under this Act or by the TPO is erroneous which has caused prejudice to the interests of Revenue, then action u/s 263 could be taken. In the present case, once we have quashed the re-assessment order including re-opening of the assessment, then no proceeding was ever pending before the AO nor any order which has caused any prejudice to the interests of Revenue is available which could be revised by exercising powers u/s 263. In other words, the very foundation to take remedial action u/s 263 has been extinguished. Therefore, no action u/s 263 can be taken. Accordingly, we allow this appeal and quash the impugned order passed u/s 263 of the Income Tax Act. 7. In the result, both appeals are allowed. Order pronounced on 12 th January,2026. Sd/ -Sd/- (KRINWANT SAHAY) (RAJPAL YADAV) ACCOUNTANT MEMBER VICE PRESIDENT “Poonam” Printed from counselvise.com ITA Nos. 989 & 175/CHD/2024 A.Y. 2015-16 6 आदेश की Ůितिलिप अŤेिषत/ Copy of the order forwarded to : 1. अपीलाथŎ/ The Appellant 2. ŮȑथŎ/ The Respondent 3. आयकर आयुƅ/ CIT 4. िवभागीय Ůितिनिध, आयकर अपीलीय आिधकरण, चǷीगढ़/ DR, ITAT, CHANDIGARH 5. गाडŊ फाईल/ Guard File सहायक पंजीकार/ Assistant Registrar Printed from counselvise.com "