AGGARWAL ABHUSHAN PRIVATE LIMITED,DELHI V. DCIT CIRCLE 1(1),DELHI/NATIONAL FACELESS APPEAL CENTRE DELHI, NEW DELHI

ITA 712/DEL/2025

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The case involves Aggarwal Abhushan Private Limited appealing against an order of reassessment for the assessment year 2016-17, which was passed by the Deputy Commissioner of Income Tax, Circle-1(1), Delhi. The primary contention was that the reassessment notice issued under section 148 of the Income Tax Act was time-barred. The Tribunal considered additional grounds raised by the assessee regarding the jurisdiction and the timeliness of the reassessment notice, referencing several Supreme Court decisions that clarified the applicable time limits for such notices. The Tribunal admitted the additional grounds and found them meritorious, leading to the quashing of the reassessment order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 774565 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2016-2017
• Appeal Filed On: 06-02-2025
• Other Referred Cases: Union of India v. Ashish Agarwal, Union of India v. Rajeev Bansal, Ram Balram Buildhome (P.) Ltd. v. ITO
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: OM PRAKASH
• Assessee Lawyers: MEENAL GOYAL; MEHAK GUPTA
• Keywords: Set aside; Reassessment proceedings; Period of limitation; Reopening of assessment
• Section: 147; 148

Judgement Text

"1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “C”: NEW DELHI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI SUDHIR KUMAR, JUDICIAL MEMBER ITA No. 712/Del/2025 (Assessment Year: 2016-17) Aggarwal Abhushan Private Limited, B-5/153, Sector-7, Rohini, Delhi-110085 Vs. DCIT Circle-1(1), Delhi/ National Faceless Appeal Centre, Delhi-110002 (Appellant) (Respondent) PAN: AAJCA4109J Assessee by : Ms. Meenal Goyal, Adv. & Ms. Mehak Gupta, Adv. Revenue by: Shri Om Prakash, Sr. DR Date of Hearing 01/09/2025 Date of pronouncement 03/09/2025 O R D E R PER M. BALAGANESH, A. M.: 1. The appeal in ITA No.712/AGR/2025 for AY 2016-17, arises out of the ld. National Faceless Appeal Centre, Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] in Appeal No.NFAC/2015-16/10283327 dated 21.01.2025 against the order of assessment passed u/s 147 r.w.s. 144B of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 17.05.2023 by the Assessment Unit, (hereinafter referred to as ‘ld. AO’) Printed from counselvise.com 2 2. The assessee has raised the following additional grounds of appeal on 28-08-2025:- i. That the impugned re-assessment order dated 17.05.2023 passed by the Respondent u/s 147 r.w.s 144B of the Income Tax Act, 1961 (\"the Act\") is premised on the proceedings that were time barred and hence without jurisdiction and liable to be quashed. ii. That the notice dated27.07.2022 issued u/s 148 of the Act seeking reassessment for AY 2016-17 is barred by limitation as per 1»proviso to Section 149 of the Act, as interpreted by the Hon'ble Supreme Court in Union of India v. Ashish Agarwal 444 ITR 1 and Union of India v. Rajeev Bansal 469 ITR 46. iii. That the surviving period after considering all exclusions as per the ratio of decision in Rajeev Bansal (supra)and as per 4th proviso to Section 149, was 7 days which expired on 21.06.2022. iv. That pursuant to expiry of limitation on 21.06.2022, the Respondent ceased to have jurisdiction to issue notice u/s 148 of the Act for AY 2016-17 vide Ram Balram Buildhome (P.) Ltd. v. ITO: 477 ITR 133 and Kanwaljeet Kaur v. ACIT 2025] 171 taxmann.com 174 (Delhi). 3. We have heard the rival submissions and peruse the materials available on record. We find that the additional grounds raised by the assessee go to the root of the matter and the facts relevant for its adjudication are already on record. Hence, in view of the decision of the Hon’ble Supreme Court in the case of NTPC Ltd reported in 229 ITR 383(SC), we are inclined to admit those additional grounds and take up the same first for our adjudication. 4. We find that the assessee had challenged the validity of assumption of jurisdiction by the Learned AO under section 147 of the Act. The Learned AR before us argued that the notice issued under section 148 of the Act is barred Printed from counselvise.com 3 by limitation in view of the decision of the Hon’ble Supreme Court in the case of Union of India vs Rajeev Bansal reported in 469 ITR 46 (SC). In support of this proposition, the Learned AR placed on record the table containing the list of dates and events as under:- A. Date of original notice under section 148 30-6-2021 B. Date of decision of Hon’ble Supreme Court in the case of Ashish Agarwal reported in 444 ITR 1 (SC) 4-5-2022 C. Time remaining till 30-6-2021 0 days D. Show cause notice issued under section 148A(b) of the Act Conveying reasons for reopening and providing underlying Material/ documents to the assessee as per the mandate of Ashish Agarwal judgement of H’ble Supreme Court 28-5-2022 E. Two weeks time period elapsed from issuance of show cause Notice under section 148A(b) of the Act to be excluded 11-6-2022 F. Reply filed by the assessee in response to show cause notice Under section 148A(b) of the Act 14-6-2022 G. Addditional period of 7 days elapsed to be excluded in terms of 4th proviso to section 149 of the Act 21-6-2022 H. Surviving time limit under the Act read with the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 Printed from counselvise.com 4 (TOLA) expires as per Point C above 21-6-2022 I. Order passed under section 148A(d) of the Act 26-7-2022 J. Notice issued under section 148 of the Act 27-7-2022 5. Hence, in view of the observations of the Hon'ble Supreme Court in the case of Rajeev Bansal (supra), the extended due date for issuance of notice u/s 148 of the Act expired on 21-06-2022 and since, the notice u/s 148 of the Act is issued on 27-7-2022, the said notice is to be treated as barred by limitation and consequentially reassessment proceedings would be liable to be quashed as void ab initio. This issue was also subject matter of consideration by the Hon’ble Jurisdictional High Court in the case of Ram Balram Buildhome Vs. ITO & Anr reported in 445 ITR 1 (Del) dated 30.01.2025. Relevant operative portion of the said order is reproduced herein below:- “65. Thus, in the facts of the present case, the last date for issuance of notice under Section 148 of the Act for AY 2013-14 under the statutory framework, as was existing prior to 01.04.2021 was 31.03.2020, that is, six years from the end of the relevant assessment year. 66. By virtue of Section 3 (1) of TOLA time for completion of specified acts, which fell during the period 20.03.2020 to 31 12.2020 were extended till 30.06.2021 [Notification No.38/21 dated 27.04.2021]. Thus, the notice dated 01.06.2021 was issued twenty-nine days prior to the expiry of period of limitation for issuing a notice under Section 148 of the Act as was extended by TOLA. As noted above, the period from 01.06.2021, the date of issuance of notice, and 04.05.2022, being the date of decision of the Supreme Court in Union of India & Ors. v. Ashish Agarwal is required to be excluded by virtue of the third proviso to Section 149 (1) of the Act. Printed from counselvise.com 5 67 Additionally, the period from the date of decision in Union of India & Ors. v. Ashish Agarwal2 till the date of providing material, as required to the accompanied with a notice under Section 148A (b) of the Act. is required to be excluded. Thus, the period between 04.05.2022 to 30.05.2022, the date on which the AO had issued the notice under Section 148A (b) of the Act in furtherance of his earlier notice dated 01.06.2021, is also required to be excluded by virtue of the third proviso to Section 149 (1) of the Act as held by the Supreme Court in Union of India & Ors. v. Rajeev Bansal4. 68. In addition to the above, the time granted to the petitioner to respond to the notice dated 30.05.2022-the period of two weeks-is also required to be excluded by virtue of the third proviso to Section 149 (1) of the Act. The petitioner had furnished its response to the notice under Section 148A (b) of the Act on 13.06.2022. Thus, the period of limitation began running from that date. 69. As noted above, by virtue of TOLA, the AO had period of twenty-nine days limitation left on the date of commencement of the reassessment proceedings, which began on 01.06.2021, to issue a notice under Section 148 of the Act. The said notice was required to be accompanied by an order under Section 148A (d) of the Act. Thus, the AO was required to pass an order under Section 148A (d) of the Act within the said twenty- nine days notwithstanding the time stipulated under Section 148A (d) of the Act. This period expired on 12.07.2022. 70. Since the period of limitation, as provided under Section 149 (1) of the Act, had expired prior to issuance of the impugned notice on 30.07.2022. The said is squarely beyond the period of limitation. 71. It is contended on behalf of the Revenue that the AO is required to pass an order under Section 148A (d) of the Act by the end of the month following the month on which the reply to the notice under Section 148A (b) of the Act was received. Thus, the order under Section 148A (d) of the Act as well as the notice under Section 148 of the Act (both dated 30.07.2022) are within the prescribed period. This contention is without merit as it does not take into account that proceedings under Section 148A of the Act necessarily required to be completed within the period available for issuing notice under Section 148 of the Act, as prescribed under Section 149 of the Act. Thus, the time available to the AO to pass an order under Section 148A (d) of the Act was necessarily truncated and the same was required to be passed on or before 12.07.2022. The fourth proviso to Section 149 of the Act did not come into play as the time Printed from counselvise.com 6 period available for the AO to pass an order under Section 148A (d) of the Act was in excess of the seven days. 72. In view of the above, we find merit in Mr. Sehgal's contention that the impugned notice dated 30.07.2022 has been issued beyond the period of limitation. 73. The petition is accordingly allowed and the impugned order dated 30.07.2022 passed under Section 148A (d) of the Act; the impugned notice dated 30.07.2022 issued under Section 148 of the Act; and the assessment order dated 30.05.2023 framed under Section 147 of the Act pursuant to the notice dated 30.07.2022 for AY 2013-14, are set aside. Pending application is also disposed of.” 6. Respectfully following the said decision, we hold that the notice issued u/s 148 of the Act on 27-7-2022 is barred by limitation. Accordingly, the Additional grounds raised by the assessee are allowed. 7. Since, reopening of assessment has been quashed hereinabove, the adjudication of the other original grounds raised by the assessee becomes academic in nature and they are left open. 8. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 03/09/2025. Sd/- Sd/- /- (SUDHIR KUMAR) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 03/09/2025 f{x~{tÜ f{x~{tÜ f{x~{tÜ f{x~{tÜ Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi Printed from counselvise.com "