ANIL KUMAR GARG,DELHI V. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 43(1), DELHI, DELHI

ITA 6415/DEL/2025

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The case involves Anil Kumar Garg, the appellant, contesting a reassessment notice issued by the Deputy Commissioner of Income Tax, Circle 43(1), Delhi, for the assessment year 2016-17. The primary legal contention was whether the reassessment notice issued under section 148 of the Income Tax Act was barred by limitation. The appellant argued that the notice was issued beyond the permissible period as extended by the TOLA Act, 2020, and without compliance with the legal requirements of sections 147, 148, 148A, 151, and 149 of the Act. The Tribunal examined the timelines and legal provisions applicable, particularly in light of the Supreme Court's decision in UOI vs. Rajeev Bansal, which influenced the interpretation of the limitation period for issuing reassessment notices.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 833965 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2016-2017
• Appeal Filed On: 10-10-2025
• Other Referred Cases: UOI vs. Ashish Agarwal, UOI vs. Rajeev Bansal
• Laws Referred To: Income Tax Act, TOLA Act, 2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY KUMAR ARORA
• Keywords: Reassessment proceedings; Period of limitation
• Section: 147; 148

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’ NEW DELHI BEFORE SHRI SUDHIR KUMAR, JUDICIAL MEMBER AND SMT. RENU JAUHRI, ACCOUNTANT MEMBER ITA No. 6415/DEL/2025 (AYR. 2016-17) ANIL KUMAR GARG, VS. DCIT, CIRCLE 43(1), E-15/120, 1ST FLOOR, DELHI SHIV ROAD, SECTOR-8, ROHINI, DELHI – 110 085 (PAN: AAAPG1599A) (APPELLANT) (RESPONDENT) Asessee by : Sh. S.K. Gupta, CA Revenue by : Sh. Ajay Kumar Arora, Sr. DR Date of Hearing 27.1.2026 Date of Pronouncement 06.02.2026 ORDER Per Sudhir Kumar, JM : This appeal filed by the Assessee is directed against the order dated 26.9.2025passed by the National Faceless Appeal Centre (NFAC), Delhi for the assessment year 2016-17. At the time of hearing, both the sides have only argued the following legal issues:- 1. On the facts and circumstances of the case, the reassessment proceedings initiated u/s. 147 of the I.T. Act by issue of notice dated 27.7.2022 u/s. 148 of the I.T. Act is barred by limitation and has been initiated without making compliance of provision of section 149 read with TOLA Act, 2020 therefore, the reassessment proceedings and consequent reassessment order are void ab initio. Printed from counselvise.com 2 2. The reassessment proceedings and consequent reassessment both are invalid and without jurisdiction as the said assessment has been initiated and completed without complying with legal requirements of the provisions of section 147, 148, 148A, 151, 149 of the Act therefore, such assessment is void abintio and liable to be quashed. 2. Ld. AR for the assessee with regard to notice beyond surviving period in view of section 149(1) r.w. relaxation granted under TOLA Act has stated that notice u/s. 148 of the Act was issued under the un-amended Act to the appellant on 30.6.2021. The section 148 of the Act has been substituted by Finance Act, 2021 w.e.f. 1.4.2021 wherein notice u/s. 148 of the Act as per the old provisions of section 148 of the Act applicable upto 31.3.2021 could not have been issued after 31.3.2021. He further submitted that this issue per se was subject matter of various writ petitions filed in various High Courts and ultimately got settled by the Apex Court in the case of UOI vs. Ashish Agarwal reported in 444 ITR 1 (SC) dated 4.5.2022. The AO issued letter u/s 148A(b) of the Act on 21.5.2022. The assessee filed its reply on 2.6.2022. The AO passed an order u/s. 148A(d) of the Act on 27.7.2022 rejecting the objections of the assessee and proceeded to issue notice u/s. 148 of the act on 27.7.2022. He further submitted that now the short question that arises for consideration of the Bench is as to whether the subsequent notice issued u/s. 148 of the Act on 27.7.2022 is to be treated as time barred or not in the light of decision of Hon’ble Apex Court in the case of UOI vs. Rajeev Bansal reported in 469 ITR 46 (SC). To support his contention, he stated that the above facts can be verified from the following table and the compilation of the documents in paper book:- S.No. Particulars Paper Book 1. Assessment year 2016-17 2. Extended period of limitation as per IT Act read with TOLA 30.6.2021 3. Date of original notice u/s. 30.6.2021 1 Printed from counselvise.com 3 148 under unamended Act 4. Time surviving from date of issuance of deemed SCN till expiry of period as extended by TOLA (from 30.6.2021) 5. Date of issue of notice u/s. 148A(b) 21.5.2022 2 6. Due date of issue of notice u/s.148A(b) 2.6.2022 2 7. Reply objection filed on 2.6.2022 3-5 8. Extended date by which notice should have been issued u/s. 148 (A+B) 2.6.2022 9. Actual date of issuance of notice u/s. 148 27.7.2022 8 Ld. AR submitted that the AO issued the notice u/s 148 of the Act on 27-07-2022 which is to be treated time barred. Reliance has placed on the decision of Union of India & Ors Vs. Rajeev Bansal (Supra) wherein, it has been held has as under: “110. The effect of the creation of the legal fiction in Ashish Agarwal (Supra) was that it stopped the clock of limitation with effect from the date of issuance of section 148 notices under the old regime {Which is also the date of issuance of the deemed notices}. As discussed in the preceding segment of the judgment, the period from the date of the issuance of the deemed notices till the supply of relevant information and material by the assessing officer to the assessee in terms of the direction issued by this court in Ashish Agarwal (Supra) has to be excluded from the computation of the period of limitation. Moreover, the period of two weeks granted to the assessee to reply to the cause notices must be excluded in terms of the third proviso to section 149. 111. The clock started ticking for the Revenue only after it received the response of the assessee to the show cause notices. After the receipt of the reply, the assessing officer had to perform the following responsibilities; (i) consider the reply of the assessee under section 149A(C); (ii) take a decision under section 149A(d) basd on the available material and the reply of the assessee; and (iii) issue a notice under section 148 if it was a fit case for reassessment. Once the clock started ticking, the assessing officer was see State of AP v. AP Pensioners Association, (2005) 13 SCC 161 [28]. [This court observed that the “legal Printed from counselvise.com 4 fiction undoubtedly is to be construed in such a manner so as to enable a person, for whose benefit such legal fiction has been created, to obtain all consequences flowing thereform.”] PART F required to complete these procedures within the surviving time limit. The surviving time limit, as prescribed under the Income Tax Act read with TOLA, was available to the assessing officers to issue the reassessment notices under section 148 of the new regime. 112. Let us take the instance of a notice issued on 1 May 2021 under the old regime for a relevant assessment year. Because of the legal fiction, the deemed show cause, notice will also come into effect from 1 May 2021. After accounting for all the exclusions, the assessing officer will have sixty–one days [days between 1 May 2021 and 30 June 2021] to issue a notice under section 148 of the new regime. This time starts ticking for the assessing officer after receiving the response of the assessee. In this instance, if the assessee submits the response on 18 June 2022, the assessing officer will have sixty-One days from 18 June 202 to issue a reassessment notice under section 148 of the new regime. Thus, in this illustration, the time limit for issuance of a notice under section 148 of the new regime will end on 18 August 2022.” Ld. AR has submitted that in view of the observations of the Hon’ble Supreme Court in the case of Rajeev Bansal (supra), the notice u/s. 148 is to be treated as barred by limitation and consequently the reassessment proceedings would be liable to be quashed as void ab initio. 8. The Ld. DR relied upon the orders of the lower authorities. 9. We have heard the revival contentions of the parties and gone through the material available on record. In view of the aforesaid discussions, we find force in the contention of the Ld. AR that 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 18.6.2022 and since, the notice is u/s 148 of the Act is issued on 27-07-2022, thus the said notice was time barred by limitation. Respectfully following the aforesaid decision of the Hon’ble Supreme Court, we hold that the notice issued u/s 148 of the Act on 27.7.2022 is time barred by limitation, hence, the same is quashed and consequently, the reassessment also quashed. Accordingly the legal issues raised by the assessee is allowed. Printed from counselvise.com 5 10. Since we have decided the legal grounds in favour of the assessee, the other grounds have become academic. 11. In the result, Assessee’s appeal is allowed in the above terms. Order pronounced in the Open Court on 6.2.2026. Sd/- Sd/- (RENU JAUHRI) (SUDHIR KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER SR BHATNGAR Date: 6-2-2026 Copy forwarded to: - 1. Appellant 2. Respondent 3. DIT 4. CIT (A) 5. DR, ITAT Assistant Registrar, ITAT, Delhi Benches Printed from counselvise.com "